Boeing stock set to continue to be hurt by economic slowdown
The aeronautics sector has been under pressure since the spring of last year, but more particularly the action of Boeing, which underperforms that of its European counterpart by almost 30% (exchange rate corrected) over one year.
The underperformance of Boeing compared to Airbus is explained by a deterioration of the financial situation due to the pandemic and the setbacks of the 737 MAX and the 787 Dreamliner. In the past 12 quarters, dating back to just after the second 737 MAX crash, Boeing has lost about $24 billion, consumed about $34 billion in cash flow and missed analyst estimates nine times.
Boeing’s stock should remain on a downtrend for the next few months as the economic slowdown will continue and continues to be undervalued. 66 of 67 economists had an estimate of the ISM manufacturing index for April that was too high compared to reality.
The aerospace sector is also affected, like all assets, by the monetary tightening of central banks, which puts pressure on asset valuations.