Boeing Stock Outlook Amid Labor Strike

Investing.com — Morgan Stanley analysts stated in a note on Friday that Boeing (NYSE:BA)'s stock faces increased downside risks following a labor strike vote by the International Association of Machinists (IAM) Local 751.

The union rejected Boeing's proposed labor contract, extending an ongoing work stoppage that complicates the company’s operations and financial position.

Morgan Stanley noted, "The IAM 751 Union voted against the new labor contract," adding, "We expect Boeing's stock to react negatively."

Concerns about potential cash outflows, delays in supply chain normalization, and a possible capital raise are making investors wary.

While maintaining a price target of $170 and an Equal-weight rating on the stock, analysts warned that if the strike persists, Boeing's stock could drop to $110 by year-end.

Since the strike announcement, Boeing's stock has hovered around $150, a level that could be breached with continued labor disruptions.

Morgan Stanley highlighted three major risks linked to Boeing's current situation:
1. Labor resolution uncertainty
2. Potential capital raise
3. Supply chain disruptions

They cautioned that the extended strike likely amplifies supply chain headwinds, with delayed productions further pressuring stock values.

Investor optimism regarding Boeing's recovery may wane, as "heightened uncertainty over cash outflows" complicates the timeline for restoring normalized free cash flow generation.

Although not downgrading Boeing's stock currently, the analysts emphasized that the labor strike introduces significant near-term risks requiring close monitoring by investors.