Boeing Stock Forms Rare Bearish Flag as Earnings Loom: Will It Drop Further?

Boeing (NYSE:BA) stock is stuck in a bear market after falling by 26% from the year-to-date high of $254 to the current $188. It has also formed a death cross and a bearish flag pattern, pointing to more downside ahead of its quarterly results this week. 

Analysts Have Pared Back Their Boeing Targets

The ongoing Boeing stock retreat has pushed more analysts to reduce their targets. Morgan Stanley’s Kristine Liwag recently lowered the target from $250 to $225, while Royal Bank of Canada’s Ken Hebert slashed it from $265 to $235. 

Similarly, Bernstein’s Douglas Harned slashed the target from $298 to $278, while Cowen’s Gautam Khana lowered it from $250 to $240. These actions happened as Boeing continued facing major headwinds.

One of the main challenges has been its 777X jet, which is expected to enter service in 2027, seven years behind schedule and $16 billion spent. Most recently, the company identified a software issue on its 737 MAX plane, which can cause vertical navigation to shut off during an aborted landing. 

The company is also facing supply chain challenges because of the ongoing US-Iran war and President Donald Trump’s tariffs. 

Benzinga data shows that analysts expect its third-quarter revenue will be $24.3 billion, up modestly from last year’s $23.27 billion. This increase will be because the company’s deliveries have continued rising, with its 737 shipping 47 planes per month. It ended the second quarter with a backlog with $597 billion.

The option market suggests that the stock may drop further after earnings. It has a put/call volume ratio of 1.03, a sign that it has more puts than calls. Most of the put options are concentrated at $187.50, a few points below the current level. On the other hand, most of the call options are at $200.

Boeing Stock Has Formed Bearish Patterns

Technicals suggest that the stock has more downside risk in the near future. It formed a death cross pattern on September 8 as the 50-day moving average dropped below the 200-day moving average.

The stock has moved below the important support level of $203.90, its lowest level on July 21. Also, it has formed a bearish flag pattern, which is made up of a vertical line and a horizontal channel. Therefore, there is a risk that the stock will drop to $176.9, its lowest level in November last year.

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