Boeing PR Nightmares Continue; Plane Catches Fire but Investors Shouldn’t Worry

  • It appears that Boeing’s public relations problems keep mounting after a 777 plane caught fire immediately after takeoff.
  • Despite grounded planes, shares of the airline company are still soaring.
  • Analysts remain bullish on the stock as long as BA trades above the key support area of $340.

Boeing (NYSE:BA) appears to be recovering from the PR nightmares brought about by two plane crashes a few months ago. However, a video started to circulate on social media of a Boeing 777 catching fire while in flight. The airplane was headed to Manila but pilots had to make an emergency landing after passengers noticed that the plane emitted fire from under the right wing. Fortunately, all passengers and crew members were able to safely disembark in Los Angeles.

events like this one that compelled Democratic Senator Richard Blumenthal to call Boeing planes “flying coffins.” Nevertheless, investors shouldn’t lose sleep over Boeing’s faulty planes because the company is aggressively buying its own shares. The strategy appears to be working as the stock is in the green this year.

Strong Buyback Program Lifts BA Stock While Planes Are Grounded

Boeing’s 737 MAX planes have been grounded since mid-March following two crashes that killed 346 people. In spite of the grounding and public relations mess that came with it, BA proves to be a resilient stock. The security is up by 16% year-to-date.

It’s hard to believe that the stock of an airline company on the receiving end of bad press is still growing significantly. Investors should thank the company’s multi-billion dollar buyback program for BA’s gains over the years.

According to the Seattle Times, Boeing allocated 92% of operating cash flow to share buybacks and dividends to the delight of investors. In addition, share buybacks have amounted to $70 billion, adjusting for inflation,…

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