Industrials

The grounding of the Boeing 737 MAX 9 is likely to impact 1Q earnings for airlines that fly the plane, Evercore ISI analysts write. United Airlines and Alaska Air could see wider than anticipated 1Q losses as the grounding cuts into flying capacity, the analysts say. Assuming the grounding continues through the end of January and including the impact of recent bad weather, they estimate United’s 1Q loss to widen to 73 cents per share from its previous estimate of a 32 cent per share loss, and Alaska’s to widen to 80 cents per share from the 37 cent per share loss they previous forecast. Still, they say airlines should have an easier time accommodating affected passengers as post-holiday demand slows down.

By Tomi Kilgore Stock falls more than 20% from December high after Wells Fargo analyst cuts rating, price target to the lowest on the Street Shares of Boeing Co. kept falling Tuesday, enough to enter “bear-market” territory, after a downgrade by Wells Fargo, which said there’s a good chance the Federal Aviation Administration’s investigation won’t be “clean.” The FAA’s probe “increases significantly” the risk that production and deliveries will be curtailed, analyst Matthew Akers wrote, in a note titled, “FAA audit opens up a whole new can of worms.” He doesn’t see enough upside for Boeing’s stock to justify that risk. The aerospace and defense giant’s stock (BA) sank 7.1% in morning trading toward a two-month low. The $15.36 price decline was shaving about 101 points off the price of the Dow Jones Industrial Average DJIA, which fell 126 points, or 0.3%. (Read more about how Boeing’s stock can affect

Boeing (NYSE:BA) stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/16/2024 6.38% Wells Fargo $280 → $225 Downgrades Overweight → Equal-Weight 12/15/2023 48.94% UBS $275 → $315 Maintains Buy 12/12/2023 — William Blair Initiates Coverage On → Outperform 12/06/2023 11.11% Barclays $210 → $235 Maintains Equal-Weight 12/01/2023 25.3% Stifel → $265 Initiates Coverage On → Buy 11/28/2023 30.02% RBC Capital $200 → $275 Upgrades Sector Perform → Outperform 11/20/2023 27.66% Deutsche Bank → $270 Upgrades Hold → Buy 11/01/2023 — Goldman Sachs Maintains Buy 10/31/2023 2.6% Northcoast Research → $217 Upgrades Neutral → Buy 10/26/2023 -5.44% RBC Capital $210 → $200 Maintains Sector Perform 10/26/2023 28.13% Citigroup $285 → $271 Maintains Buy 10/26/2023 4.02% Morgan Stanley $235 → $220 Maintains Equal-Weight 10/11/2023 30.02% UBS → $275 Initiates Coverage On → Buy 10/03/2023 8.75% Wells Fargo $270 → $230 Maintains Overweight 09/28/2023 -3.55%

Wells Fargo analyst Matthew Akers downgrades Boeing (NYSE:BA) from Overweight to Equal-Weight and lowers the price target from $280 to $225.

Boeing (BA) plans to add further quality inspections throughout the build process for the 737 Max after the blowout of a cabin panel on an Alaska Air Group (ALK) flight in early January, Boeing Commercial Airplanes Chief Executive Stan Deal said in a message to employees Monday. The plane maker also deployed a team to Spirit AeroSystems (SPR), which manufactures Boeing fuselages, to check the company’s work, the letter said. Deal also said both Boeing and Spirit AeroSystems are opening their facilities to 737 operators for additional oversight inspections to review production and quality processes. China Southern, an airline that was set to receive Max planes, is planning to conduct additional safety inspections on all its Boeing 737 Max jets, the Wall Street Journal reported Monday, citing people familiar with the matter. The Civil Aviation Administration of China has also advised the country’s airlines to conduct safety inspections on all

Boeing lost almost $19B in market value this week in the wake of the Alaska Airlines incident. Investors are focused on the impact on its closely-watched free cash flow from potential delays in certification and production increases. Many sell-side analysts trimmed forecasts for 2024, but three this week also cut their 2025 outlooks, one by almost a fifth from the current consensus of around $9.3B. Boeing is off 2.2% at $217.66.