Boeing (BA)

[behappyalways]

Boeing to temporarily halt 737 Max production in January
https://www.bbc.com/news/business-50817124

[winston]

not vested

Dec 24, 2019

Chart Of The Day: Boeing Stock Set To Plummet Despite CEO Ouster

By Pinchas Cohen

Trading Strategies

Conservative traders would wait for a close below $311, to establish a 3% filter, to weed out a bear trap, before committing to a short position.

Moderate traders may wait for the flag completion, including a price that closes below the continuation pattern for a couple of days, then returns to retest the resistance of the flag.

Aggressive traders may short now, provided they understand the risk of lack of confirmation for the pattern and have planned entries and exits that they stick to and that offer a workable risk-reward ratio.

Source: Investing.com

https://www.investing.com/analysis/char ... -200494577

[behappyalways]

After the crashes
Boeing’s misplaced strategy on the 737 MAX
Time for Dennis Muilenburg to go, and for the planemaker to adopt a new approach

Editor's Note (December 23rd): After publication of this article, Boeing sacked its chief executive, Dennis Muilenberg, on December 23rd. He will be replaced by David Calhoun, the company's chairman, who will take up the post in January.

IN MARCH A Boeing 737 MAX aircraft crashed in Ethiopia, just six months after a similar accident in Indonesia. Nearly 350 people were killed in the two disasters, which revealed a flaw in the MAX’s flight-control system and put into question a vast industrial enterprise.

Airlines are relying on the delivery of thousands of MAX planes over the next decade or so. Boeing was expected to make up a large share of its future profits from the MAX. The firm is one of America’s biggest exporters and at least a million people work for it or for its suppliers.

Since March Boeing’s response has been an ugly mixture of remorse, evasion and swagger, as it has gambled that it can get the MAX, and its business, rapidly back in the air. On December 16th that strategy ran out of runway when the firm announced it would suspend production of the stricken plane.

Boeing’s defiance began with its decision to stick with its chief executive, Dennis Muilenburg (although he was replaced as chairman in October). There has been no public, comprehensive, independent investigation by the firm into what went wrong. In its place there have been leaks galore and reports about software problems and corners being cut.

Even though the MAX is not allowed to fly, Boeing’s factories have continued to churn out new planes that sit on the tarmac while customers are unwilling or unable to take delivery of them or make full payment. The firm signalled to Wall Street that business would return to normal soon enough and it continues to pay a dividend, despite burning up $3bn of cash last quarter.

Boeing had indicated to investors, suppliers and customers that the MAX would be flying by the end of 2019, even though this is a decision it should not be able to determine.

Boeing no doubt wants to protect its workers and defend itself from a barrage of lawsuits. But the industry’s lack of competition lets it get away with poor behaviour. In the short run the other half of the passenger-jet duopoly, Airbus, cannot increase output so as to offer customers an alternative source of aircraft.

There is a queasy sense that Boeing has played a game of chicken with regulators. In stoking expectations that the MAX will be airborne again soon and keeping production humming, it has presented regulators with an unenviable choice: either to let the MAX back in the air whether or not it is ready, or to damage the industry and the American economy.

Boeing’s strategy has backfired. America’s Federal Aviation Administration (FAA), the tarnished regulator which at first declined to ground the MAX, has found its backbone under new management and said that it is not yet ready to rule that the flight-control problem has been fixed.

In the past, foreign regulators have followed the FAA’s lead, but a majority of Boeing’s sales are now made outside America and authorities abroad no longer want to play wingman to the FAA. Both China and the EU have indicated that they are not yet happy. The number of idle, new MAXes piling up has grown to 400. Boeing’s strategy has strained its balance-sheet, with its inventories reaching $73bn and gross debts $25bn.

It is time for a different approach. Mr Muilenburg should be removed and the firm’s board of directors beefed up. If Boeing does not do this voluntarily, its owners and regulators should insist.

Production of the MAX should resume only when the firm has received approval from regulators around the world. Boeing needs to shore up its balance-sheet, so that it has the resources to invest and to help tide over crucial suppliers—which means eliminating its dividend.

And lastly it needs to come up with a medium-term plan for life after the MAX, in the form of a next-generation aircraft, perhaps one that relies on hybrid-electric propulsion.

Over the past decade Boeing has skimped on research, development and capital spending, investing only 7% of its sales on average, compared with around 10% at Airbus. Once the 737 MAX was the future. It is time for a new pilot and a new course.

Source: The Economist

[investar]

Everyting I read about BA is bearish. Yet the stock holds up quite well if you look at the LT chart.

It looks like a short candidate to me, but I will wait for the 28/1 results before taking action.

[winston]

Everyting I read about BA is bearish. Yet the stock holds up quite well if you look at the LT chart.

It looks like a short candidate to me, but I will wait for the 28/1 results before taking action.

Agree. I think this "Mad Max" thing may last a long time.

[winston]

not vested

Boeing’s In Trouble – And Now’s the Perfect Time to Ask Whether You Should Buy, Sell, or Hold

By Shah Gilani

If it doesn’t get its troubled 737 Max planes certified by U.S. and international regulators and in the air by this summer, it’s dwindling cash and negative cash flow from operations will implode its stock.

But, unfortunately for them, the 787 Max isn’t Boeing’s only aircraft problem.

Regulators are investigating the company’s 787 Dreamliner over whistleblower claims that its oxygen systems don’t work, that managers let defective parts get through quality control checks, and that, when workers installed planes’ floorboards, they let three-inch-long razor-sharp shards of titanium fall the plane’s sensitive electronic equipment.


Because Boeing’s facing a cash crisis, it has around $10 billion on its books, but its operating cash flow now annualizes at negative $2.5 billion, its levered free cash flow annualizes at negative $3.3 billion, and it has an annual dividend cost of $4,626,133,800.00.

Right now, I see Boeing stock facing some upward resistance around $320. If the stock firms up here and gets above $320 on good news, I’d be a buyer at around $320 to $325.

Source: Wall Street Insights

https://wallstreetinsightsandindictment ... /#deeplink

[behappyalways]

Tech: Can Boeing get its mojo back?
https://www.theedgemarkets.com/article/ ... -mojo-back

[winston]

not vested

Boeing To Drawdown Full $13.8 Billion Revolver, Hinting At Bank Lending Freeze

by Tyler Durden

Source: Zero Hedge

https://www.zerohedge.com/markets/boein ... ing-freeze

[behappyalways]

Up in the air
Boeing ponders its bail-out options
The aircraft-maker can survive for now but will eventually need to raise cash
Business


THE CORONAVIRUS laid many of Boeing’s airline customers low—literally, for many have suspended flights. Fears about the giant’s fate, already uncertain because of the year-long grounding of its best-selling 737 MAX jet after two fatal crashes, became so rife that last month Goldman Sachs, a bank, felt compelled to stress that it “will remain a going concern”. The company itself insists likewise. It is probably right—the question is not whether it will survive but how.

Boeing has a safety net. A third of revenues in 2019 came from its defence arm, which, with its services division, will bring in $5bn in profits this year, reckons Bernstein, a research firm.

It has cash on its balance-sheet, the balance of a $14bn credit line and has suspended its dividend. Dave Calhoun, Boeing’s new boss, says that the firm has $15bn in liquidity.

Jefferies, a bank, estimates that the company burns through $4.3bn of cash a month with a complete suspension of deliveries. So it may need government help if the crisis drags out. Lucky, then, that Congress folded its plea for assistance for American aviation into a $2trn stimulus package. This includes $25bn for carriers and $17bn for firms “critical to maintaining national security” (ie, Boeing).

The terms are unclear and talks ongoing. But Steve Mnuchin, the treasury secretary, has hinted that help would come with strings—including an equity stake for the state.

Boeing is unwilling to entertain this (for now). It may prefer to try to tap $454bn set aside in the stimulus for loans and guarantees to big firms, which would not involve giving up equity.

Mr Calhoun says his company can raise money in the market. But the terms would be onerous. Despite recent improvements, its ten-year bonds trade below par and the cost of insuring its debt against default remains high.

Boeing hopes that business will bounce back quickly; it has been reluctant to furlough workers, notes Ken Herbert of Canaccord Genuity, a bank. It intends to restart making the 737 MAX in May (slowly at first).

Goldman Sachs reckons that even if it delivers only half the planes planned for this year it will have the liquidity to cover a “deeply negative” cashflow. But airlines may not return to normal service for months, depressing sales. Mr Calhoun may have to pick between a bitter market rescue and an unsavoury government one.

Source: The Economist

[investar]

Everyting I read about BA is bearish. Yet the stock holds up quite well if you look at the LT chart.

It looks like a short candidate to me, but I will wait for the 28/1 results before taking action.

Agree. I think this "Mad Max" thing may last a long time.

BA at 146$ today. It still looks expensive, but USA will not allow BA to go bankrupt. Going below 100$ (18-23/3) was already scary. Pretty sure it will not go above 200$ in 2020 anymore. Looking at the options