Boeing's (NYSE:BA) reputational hit continues to increase with both airlines and consumers, analysts at BofA said in a client note this week.
Their comments follow a report by Bloomberg, which states the US Department of Justice (DoJ) is working to determine if the January 5th Alaska Airlines door plug incident constitutes a breach of the deferred prosecution agreement Boeing made with the DoJ in early 2021.
Meanwhile, the FAA has given BA 90 days to devise a plan to address systematic quality control issues at the company.
Due to the current issues, and despite being in a strong civil aviation market, BofA thinks Boeing's shares will likely be range-bound for the time being.
"Additionally, we think that financial targets will necessarily need to take a backseat to compliance, safety, and quality assurance to address these issues," analysts wrote.
"In our view, this likely means the 'pot of gold' (or return) that proponents are looking for may be delayed," they added.
Despite the negatives, Bank of America maintained its Neutral rating and $225 price target on Boeing as they think the company will be able to continue to benefit from the robust global demand environment and, in the long run, "benefit from increased quality assurance, despite possible reputational and operational risk in the short to medium term."