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Investing.com -- Jefferies has cut its price target on Boeing (NYSE:BA), warning that certification of the company’s long-delayed 777X jet is once again slipping behind schedule, threatening to push the first delivery into 2027.
The broker trimmed its price target to $255 from $275, implying about 18% upside from Boeing’s last close of $214.63. Jefferies analysts based the new target on a 5.1% free cash flow (FCF) yield on projected 2028 FCF per share of $12.95, now adjusted for the conversion of preferred stock.
Management recently cautioned that the 777X certification program is falling behind, even as Boeing works with the Federal Aviation Administration (FAA) on additional phases of Type Inspection Authorization needed to accumulate flight credits.
While the 777-9 had shown progress, including a fifth test aircraft’s maiden flight in August, the company’s warning “creates an outsized financial impact given the forward loss position,” analysts led by Sheila Kahyaoglu said.
Jefferies estimates the delay could lead to a new non-cash charge of as much as $4 billion in the third quarter, tied to additional customer concessions, production schedule disruption, and the need to reconfigure existing inventory.
Boeing has $1.1 billion of deferred production to write down, with the balance potentially booked into accrued liabilities. The analysts also see a $2 billion FCF hit in 2026 if the 18 planned deliveries for that year are deferred.
The 777X has already accumulated more than $10 billion in charges since its initial target entry into service in 2020.
Previous setbacks included a $6.5 billion reach-forward loss that year tied to COVID-19, timeline revisions and design changes, a $1.5 billion abnormal cost hit when production was paused over 2022–23, and additional charges in 2024 linked to higher costs and a union agreement.
Jefferies’ FCF forecasts have now been reset lower. The broker now projects a $2.6 billion outflow for 2025, followed by $3.5 billion in 2026, down from $5.5 billion previously, and $7.3 billion in 2027.
It noted that cash usage for the 777X program alone is expected to reach $3.9 billion in 2025 and $3.4 billion in 2026 before easing. Despite the reduced outlook, the analysts still expect cash flow to climb toward $10.6 billion in 2028 and $13 billion in 2029 as deliveries ramp.
The 777X backlog stands at 565 jets, with Emirates and Qatar Airways accounting for the largest share of orders. Production is expected to step up to 60 aircraft annually between 2027 and 2031.