The 737 Max fiasco continues on, and investors have plenty of reasons to steer clear of this company right now. Boeing Co. (NYSE:BA) has had a difficult time generating new orders, and investors overall seem to be taking an overly bearish position on this company at the present time.
The question remains, however: will the story change, and can Boeing regain its previous momentum in 2020, or will this 737 catastrophe carry on longer?
Boeing’s reputation with various government agencies has been seriously strained as a result of the whole 737 Max ordeal. This reality has led to groundings and essentially dried up demand for new orders of these planes, with worries that cancellations will grow and the aerospace manufacturer’s backlog may be affected.
These concerns are unlikely to abate in the near-term, but I would expect to see some movement or a complete resolution before the end of a year, meaning Boeing represents a buy and hold scenario, in my opinion.
I have continued to like Boeing stock on the ride up to its highs, and believe the company’s stock price currently reflects excellent value, given the broad range of businesses Boeing is in, as well as the size and stability of the company’s cash flow and earnings.
With defense being a big part of Boeing’s business as well, and defense spending only likely to increase in the U.S. and across the globe, Boeing’s current hiccups in the aerospace division mask its strength elsewhere in businesses such as defense.
Boeing is a massive blue-chip stock that generates impressive free cash flow and has the resources to be patient with the 737 Max and have all concerns dealt with, no matter how long it takes. I am keeping Boeing on my watch list, and will certainly take a harder look should the company’s share price deteriorate further.
Invest wisely, my friends.
