On Friday, Deutsche Bank maintained its Buy rating and $225.00 price target on Boeing (NYSE:BA) shares, highlighting a surge in 737 MAX deliveries. Boeing has reportedly delivered 22 commercial aircraft so far in June, including 21 units of the 737 MAX and one 787 model. The uptick in 737 MAX deliveries marks an improvement over the 19 aircraft delivered in the entire month of May.
The bank's analysis of public flight data and information from Cirium reveals that of the 21 MAX aircraft delivered, six were from long-term storage, while the rest were newly produced or completed from work-in-progress inventory.
The majority of the MAX aircraft were the -8 variant, with only one -9 variant delivered. However, the delivery of 787 models seems to be on hold due to reported quality issues with fastener installation.
The analyst from Deutsche Bank noted positive trends in the 737 MAX program, with June's delivery count already surpassing May's total. This is seen as a sign of momentum, particularly as 17 aircraft have flown out of Boeing's Renton facility as of June 20, indicating an increase in assembly rates. This aligns with management's previous comments on production.
Despite the progress with the 737 MAX, the analyst expressed caution regarding Boeing's widebody segment, especially the 787 models. The current halt in 787 deliveries could affect the company's second-quarter free cash flow projections, which were likely more optimistic regarding 787 outcomes. It remains to be seen if the positive performance of the 737 MAX program can mitigate the impact of the widebody delivery issues.
In other recent news, Boeing has temporarily reallocated some of its engineering staff from the X-66A experimental aircraft project to its commercial airplane programs, aiming to boost the production and delivery of its existing jet models. This decision comes as the company intensifies efforts to meet customer commitments and delivery schedules.
Meanwhile, Benchmark has downgraded Spirit AeroSystems (NYSE:SPR) stock from Buy to Hold, citing the potential acquisition by Boeing as a factor already reflected in the stock's price. This comes amidst the aerospace manufacturer's production challenges and complications related to its Airbus assets.
In addition, BofA Securities maintained a Neutral rating on Boeing stock as Aero Analysis Partners/AIR reported an increase in Boeing's 737 production and deliveries. Despite operational challenges, Citi has maintained a Buy rating on Boeing stock, expressing confidence in the company's long-term recovery.
Boeing CEO Dave Calhoun is also set to face Senate questioning over safety concerns and whistleblower allegations. These are the recent developments in the aerospace giant's journey, as it navigates through a series of challenges.
InvestingPro Insights
As Boeing (BA) sees an uptick in its 737 MAX deliveries, the latest data and insights from InvestingPro provide a deeper financial context for investors considering the aerospace giant's stock. According to InvestingPro, Boeing's market capitalization stands at a robust 108.26 billion USD, despite the company facing challenges such as weak gross profit margins, which are currently at 11.48%. This is particularly relevant as the company endeavours to ramp up production and deliveries, which could potentially improve margins over time.
An InvestingPro Tip highlights that Boeing is a prominent player in the Aerospace & Defense industry, yet it has been trading at a high EBITDA valuation multiple. This could indicate that the market has priced in expectations for future growth and recovery. Additionally, recent price movements reflect a volatile period for Boeing's stock, which has seen a 32.72% drop over the last six months, emphasizing the importance for investors to consider the company's long-term trajectory and industry position.
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