Back to top

Image: Bigstock

Another Boeing (BA) 737 Crash: 2020 Starts on a Torrid Note

Read MoreHide Full Article

The year 2019 ended on a dismal note for Boeing (BA - Free Report) , following its decision to temporarily suspend the production of its 737 Max jetliner from January 2020. This year also started with a shock for its commercial business after one of its 737-800 aircraft, operated by Ukraine International Airlines, went down on the outskirts of Tehran, taking away 176 lives.

A Brief Note on the Recent Air Crash

Per a report by The Associated Press, the Boeing 737-800 aircraft was carrying 167 passengers and nine crew members from several countries, en route to the Ukrainian capital, Kyiv. Per current news reports, the aircraft seemed to have mechanical and technical issues that ultimately led to the crash.

How Will the Air Crash Impact Boeing?

As we all know by now, Boeing’s commercial business has not been doing well, ever since its 737 Max jetliners were being grounded in March 2019, following the twin infamous air crashes. The grounding was followed by stringent investigations, production cuts, contract withdrawals and ultimately production suspension in December 2019.

The prolonged downfall witnessed by Boeing's commercial airplane unit was reflected in its third-quarter results, wherein revenues slumped year over year by 41%, on account of lower 737 deliveries. Overall commercial deliveries took a nasty hit, declining 67%, during the last reported quarter.

Evidently, the fourth-quarter results of the company are likely to reflect the impact of halted aircraft deliveries, eviction of the company's chief executive officer and finally, production suspension of the 737 Max. We can, thus, expect Boeing to report poor fourth-quarter results for its commercial business.

Price Performance

The poor performance by the company’s commercial aircraft segment has also affected its shares price, which has declined 4.8% in the past six months against the industry’s growth of 4.7%.



Zacks Rank & Stocks to Consider

Boeing currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same industry are L3Harris Technologies Inc. (LHX - Free Report) , Leidos Holdings (LDOS - Free Report) and Northrop Grumman Corp. (NOC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

L3Harris Technologies delivered a positive earnings surprise of 5.02%, on average, in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has climbed 6.6% over the past 90 days.

Leidos Holdings delivered a positive earnings surprise of 8.93%, on average, in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has moved up 3.2% over the past 90 days.

Northrop Grumman delivered a positive earnings surprise of 11.48%, on average, in the last four quarters. The Zacks Consensus Estimate for 2020 earnings has climbed 2.7% over the past 90 days.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>