By Boeing Co (NYSE: BA) has been under scrutiny throughout 2024, with its reputation taking a significant hit following a series of safety incidents, including the Alaska Airlines event on January 5th.
The company’s challenges have extended beyond just a plummeting share price, with a recent survey by Quantum Metric indicating a marked decline in passenger confidence.
According to Danielle Harvey, Global Vice President at Quantum Metric, “Our research suggests that travelers are increasingly researching and potentially avoiding Boeing aircraft before booking their flights.”
Travelers avoiding discount carriers
The survey reveals that approximately 20% of respondents now investigate the aircraft type before finalizing their travel plans.
Furthermore, 13% of travelers are steering clear of discount carriers in hopes of enhancing their safety, even though Boeing’s 737 is notably less popular among these airlines compared to Airbus’s A320.
Brendan Sobie of Sobie Aviation points out that Boeing issues impact all airlines, irrespective of their business model.
Is Boeing stock worth buying in September?
Boeing’s ongoing crisis has been reflected in its stock performance, which has declined around 30% since the beginning of 2024.
Despite multiple incidents involving Boeing aircraft this year, aviation safety remains relatively high compared to historical levels.
Professor Arnold Barnett of MIT’s recent research, published in the Journal of Air Transport Management, notes that the probability of fatal accidents on commercial flights has improved significantly, with a rate of 1 in 13.7 million passengers from 2018 to 2022.
This raises questions about whether the current weakness in Boeing shares might be overstated.
Sheila Kahyaoglu of Jefferies suggests that Boeing stock could rebound, recommending it as a buy with a potential target price of $270, representing a 55% upside. Wall Street also rates Boeing as “overweight.”
However, market analyst Crispus Nyaga anticipates that Boeing’s recovery may be gradual. He expects the stock to remain range-bound, with resistance around the $192 mark. A breakout above this level could pave the way for the share price to reach $213 in the coming months.
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