BA: What Traders Are Missing About Boeing (pt. 6)From early 2017 to March of 2019 Boeing went soaring to almost 3 times the price from $150 to $440, but why? People were traveling more than ever, planes needed to be replaced, new technology was increasing profit margins. There were numerous reasons to be long transportation stocks, especially Boeing. Boeing was king and had the shiniest bike on the block. Every airline wanted what Boeing was putting out! Then came the fall of the MAX. Two crashes in 6 months and airlines lost all their confidence in Boeing's new commercial airliner. Hundreds of planes grounded in 24 hours and Boeing was now under the microscope by every airline and Government travel safety authority. Boeing's reputation was destroyed. There's a great quote by Warren Buffet, "it takes 20 years to build a reputation and 5 minutes to ruin it." That is exactly what happened to Boeing.
So...let's look at the numbers!
As it stands currently, Boeing's revenue is LOW. We are talking 2010 low. They've taken off a 35% haircut in annual revenue since the glory years of 2017- early 2019 and have repeatedly reported negative earnings. What people fail to realize in Boeing is that (like NVDA) stocks get hyped up and people flood their money into stocks irrationally. Boeing was just the next target for this buying frenzy. Before the major run-up Boeing presented better earnings and was AT BEST a $140-$150 stock, so why are traders thinking it'll go back to above $300? Could be they don't know any better, could be they believe BA will go back to it's former glory days in a matter of a few months, could also be that their just brain washed "BTFD-ers". Any way you look at it, BA isn't that shiny bike anymore and all it's luster has faded. Sure numbers will pick up eventually, but it'll be a long time before we ever see Boeing above $300 again. If BA is going in any direction it's back to $100-$150 or even lower.
Not financial advice
