Boeing Stock Falls: What Investors Need to Know About the Jeju Flight Crash

Boeing's (NYSE:BA) stock fell more than 4% in premarket trading on Monday, December 30, following a devastating air accident in South Korea. A Boeing 737-800 operated by Jeju Air crashed at Muan International Airport on Sunday, December 29, resulting in the deaths of 179 of the 181 passengers on board. This incident has raised fresh questions about Boeing's safety record and its ongoing efforts to rebuild investor confidence.



The crash comes amid Boeing's ongoing challenges, including a 30% stock decline in 2024 and production restrictions imposed by federal regulators following January's Alaska Airlines door plug incident on a 737 MAX aircraft. Jeju Air's shares plunged 7.67% to 7,570 ($5.14) South Korean won following the crash, while Boeing's stock, already down 28.22% year-to-date, faces uncertain trading as markets process the incident's implications.

Aviation consultant and former Delta Air Lines chief pilot Alan Price emphasized that the 737-800 involved in Sunday's crash differs from the troubled MAX variant, calling it "a very proven airplane" with a strong safety record. However, the incident has added to Boeing's recent setbacks, including a seven-week machinists strike that disrupted production of key aircraft models and January's FAA manufacturing oversight restrictions. The company has struggled to rebuild its reputation following two fatal 737 MAX crashes in 2018 and 2019 that killed 346 people and led to $23 billion in losses.

Market analysts note that while distinct from previous 737 MAX issues, the crash could further impact investor confidence in Boeing as it competes with European rival Airbus for market share in the commercial aviation sector. Boeing has a consensus price target of $197.85 from 23 analysts, with a high of $260 and a low of $85. The latest ratings from JP Morgan, Wells Fargo, and RBC Capital average $158.33, implying a 12.47% downside. Boeing's 30-day average trading volume stands at 10.71 million shares, with a 52-week range of $137.03 to $264.66. The company has a market capitalization of $135.34 billion, and its 14-day Relative Strength Index is at 77.4, indicating overbought conditions.

Investors should closely monitor the ongoing investigation into the cause of the crash and its potential impact on Boeing's operations, production, and reputation. As the company works to rebuild investor confidence and regain market share, the Jeju Air crash serves as a reminder of the challenges Boeing faces in the commercial aviation sector.