BofA maintains Boeing Neutral rating, $170 target amid slow 737 output

Published 18/11/2024, 19:16
© Reuters.

On Monday, BofA Securities maintained its Neutral rating and $170.00 price target on Boeing (NYSE:BA). The assessment comes in light of recent reports from Aero Analysis Partners/AIR (AAP/AIR) indicating that Boeing's 737 production is experiencing sluggishness. No new rollout activity for the 737 model has been observed this November. This aligns with Boeing's own statements that it will take several weeks for production to fully ramp up after workers returned last Thursday.

Boeing's aircraft deliveries have also been lagging, with only one aircraft delivery reported this month, which might be recorded as an October delivery in the company's reporting. The flight activity associated with Boeing's 737s has been described as modest. Currently, only two 737 aircraft are in the midst of pre-delivery flights and are expected to be delivered soon.

Boeing's production and delivery challenges come at a time when the aerospace industry is looking to recover from the impacts of the global pandemic. The slow pace of 737 rollouts and deliveries could affect Boeing's near-term financial performance and order fulfillment. The company's efforts to resume full production capacity will be closely watched by investors and industry analysts alike.

In other recent news, Boeing's earnings and revenue developments have been at the forefront. Investment banking firm Jefferies maintained its Buy rating and $200 target for Boeing, noting that despite geopolitical tensions and market uncertainties, the strength of Boeing's order book remains robust. Boeing's recent operations have been marked by strategic moves, including the appointment of Tim Buckley, former Chair and CEO of The Vanguard Group, to its Board of Directors. Buckley joins nine other directors added since 2019, each contributing expertise across various fields.

Recent developments reveal Boeing's commercial jet deliveries faced a significant drop due to a strike, yet the company reported 63 gross orders in October with no cancellations. To stabilize its supply chain and restart jet production, Boeing provided Spirit AeroSystems (NYSE:SPR), a key supplier, with up to $350 million in advance payments.

Avia Solutions Group placed an order for 40 Boeing 737 Max 8 jets, indicating a restoring confidence in the aircraft's safety and operational capabilities. As Boeing prepares to restart production of its 737 MAX aircraft, the Federal Aviation Administration (FAA) announced its intention to increase oversight to ensure adherence to its safety risk management system.

InvestingPro Insights

The recent production challenges faced by Boeing (NYSE:BA) are reflected in its financial metrics and market performance. According to InvestingPro data, Boeing's revenue growth has been negative, with a 3.25% decline in the last twelve months as of Q3 2024. This aligns with the reported sluggishness in 737 production and delivery delays.

InvestingPro Tips highlight that 16 analysts have revised their earnings downwards for the upcoming period, and sales are anticipated to decline in the current year. These projections are consistent with the production slowdown and delivery issues mentioned in the article.

The company's stock price has also been affected, with InvestingPro data showing a significant 22.11% decline over the past three months. This drop likely reflects investor concerns about Boeing's production challenges and their potential impact on financial performance.

For readers seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Boeing, providing a deeper understanding of the company's current position and future prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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