Boeing avoided a strike that threatened to disrupt production. Its stock rose.

Boeing avoided a strike that could have disrupted the production and certification of new aircraft. Engineers and technicians at the aircraft manufacturer approved a new four-year collective bargaining agreement on October 1. Following this decision, Boeing’s stock jumped 3.4%.

The Society of Professional Engineering Employees in Aerospace (SPEEA), which represents approximately 13,000 engineers and 4,000 technical specialists at Boeing, has approved a new four-year collective bargaining agreement with the company. It provides for an immediate 10% pay raise, and on average, the salaries of SPEEA-represented employees will increase by approximately 32% over four years, according to Bloomberg. In addition, Boeing will provide the union leadership with reports on changes in headcount twice a year.

“If a strike begins, the 777 aircraft certification program will essentially come to a halt until the engineers return to work,” Boeing CEO Kelly Ortberg warned in September. According to him, the consequences could also affect the production of the aircraft.

Boeing is currently in the final stages of bringing the recently approved 737 Max 7 and the not-yet-certified 737 Max 10 to market. Regulators are investigating a software issue with the 737 Max 10 that could delay the aircraft’s release. Along with the 777, these models are crucial for Boeing, as the company is counting on them to increase cash flow, strengthen its balance sheet, and reduce debt, Bloomberg notes.

Last year, a strike by technical workers at the St. Louis plant disrupted production of Boeing military aircraft and became the company’s longest strike since 1948. And in 2024, a strike by about 33,000 employees in Seattle halted production of commercial airliners for more than 50 days, Bloomberg notes.

Since the beginning of the year, Boeing's stock has fallen 11.4%. Analysts' average price target suggests upside potential of approximately 44% relative to the closing price on October 1.

According to MarketWatch, 27 analysts recommend buying the aircraft manufacturer's stock, whereas just a month ago there was one fewer. There are no recommendations to sell the company's stock.

Argus Research analyst Christine Ruggieri, who upgraded her recommendation on Boeing from “Hold” to “Buy” in August, explained her decision by noting that the market is expecting a significant increase in the company’s production volumes. As a result, the proportion of “bullish” ratings reached its highest level since October 2022.

This article was AI-translated and verified by a human editor