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Investing.com -- Boeing is on track for higher 737 deliveries in the third quarter, driven by steady production and pre-delivery flight activity, according to Bank of America.
The bank cited data from Aero Analysis Partners (AAP) showing that Boeing has delivered 16 737s so far in September, following “the typical pattern of steady deliveries through mid-month before ramping up toward the end.”
If the trend continues, BofA said September deliveries are expected “to fall within the high thirties to low forties levels, consistent with the performance seen in July and August.”
The bank added that this would bring total third-quarter deliveries to approximately 118 units, up from 104 in the second quarter and 92 in the same period last year, reflecting a clear year-on-year increase.
BofA noted that “consistent 737 deliveries set Boeing up for a 3Q increase.” The analyss stated that production remains stable at rate-38, with 37 rollouts in August and 11 so far in mid-September.
Despite this progress, BofA highlighted that Boeing’s CEO emphasized ongoing focus on the rework KPI, which “remains just below ‘green,’ aligning with earlier rework-related concerns raised by AAP’s sources in Renton.”
This is said to suggest a rate-42 increase is unlikely in October, though BofA expects FAA approval later in the fourth quarter.
BofA also expects continued strength for the 787 program, with nine deliveries projected in September.
“If this forecast proves accurate, deliveries will total 26 units in 3Q, exceeding the 24 units delivered in 2Q and marking a significant improvement over the 14 units delivered during the same quarter last year,” the note said.
BofA maintained a Buy rating on Boeing and $270 price target.