Boeing Co. (NYSE:BA) recently halted negotiations with the International Association of Machinists and Aerospace Workers (IAM), pulling its latest offer off the table after a month-long strike began in September.
The strike left Boeing's northwest operations in Washington at a standstill. Over 33,000 workers are demanding better wages and benefits.
The company initially offered a 30% wage hike and improved retirement benefits, but the union's "non-negotiable" demands led to a collapse in talks, despite mediation efforts.
Boeing Chief Operating Officer Stephanie Pope said the company is considering selling $10 billion of new stock to offset the cash hemorrhage.
With S&P Global and Moody's reviewing Boeing's credit rating, a downgrade to junk status may be on the horizon, further complicating its financial future.
Read Also: Boeing Says 'Further Negotiations Do Not Make Sense' After Striking Workers Bring Down Planemaker's Credit Rating
Boeing Troubles Extend Beyond Labor Strikes
The Arlington, Virginia-based company's stock continues to plummet, dropping 38.57% year to date. So far this year, the stock is down 17.95%.
Chart created using Benzinga Pro
The technical outlook offers little comfort: Boeing's share price of $154.65 is well below its 20-day and 50-day simple moving averages.
This confirms a strongly bearish trend.
Chart created using Benzinga Pro
The Moving Average Convergence Divergence (MACD) indicator sits at a negative 3.13, adding to the evidence of a bearish phase, while the stock's Relative Strength Index (RSI) of 44.48 signals it's neutral.
Moreover, the stock's been treading in the lower bearish band of the Bollinger Bands for some time.
Meanwhile, Boeing's eight-day simple moving average (SMA) of $153.94 is the only hint of a short-term bullish signal, but with the 200-day SMA way above at $186.15, the long-term outlook remains bearish.
Downgrade Risk Looms
Boeing's financial and operational challenges seem far from over.
The breakdown in union negotiations, coupled with the possibility of a credit downgrade, paints a bleak picture.
Investors should brace for potential turbulence ahead as the stock continues to struggle with bearish momentum across multiple technical indicators.
- Boeing Hit With 737 Safety Alert, Issues Deliveries Warning As Strike Continues
Image: Shutterstock
