Boeing Co. faced a decline in its share value when it revealed plans of implementing a hiring freeze and delaying pay raises for its salaried workers amid a worker strike. The company's CFO, Brian West, communicated these measures through a memo addressed to the staff on Monday. Additionally, West indicated that Boeing would reduce orders for its 737, 767, and 777 jets, and the prospect of temporary furloughs for both employees and executives is being deliberated.
The strike that commenced on Friday involved 33,000 aircraft assembly workers who walked off the job after rejecting a contract proposal from Boeing and the International Association of Machinists and Aerospace Workers (IAM) that suggested a 25% increase in wages over four years. The potential financial impact of the strike was underscored by Jefferies aerospace analyst Sheila Kahyaoglu, who estimated that a 30-day strike could cost Boeing approximately $1.5 billion. CFO Brian West emphasized that while efforts are being made to reach a new contract agreement, the strike poses a significant threat to the company's recovery, necessitating actions to conserve cash and secure their collective future.
Analysts are weighing in on Boeing's future performance, with an average 12-month price target of $205.67 by Wall Street analysts. This includes a high target of $235 and a low target of $119. Additionally, the stock market's average return of 10% per year contrasts with Boeing's staggering 38.06% decline year-to-date. Despite this, the average analyst price target suggests the potential for upward movement in the stock value.