Boeing Expert Says 737 MAX Freeze & Certification Challenges May Lead To Customer Loss: BofA Analyst
Portfolio Pulse from Lekha Gupta
BofA Securities analyst Ronald J. Epstein discussed the FAA's production freeze of Boeing's 737 MAX and its implications for MAX 7 and MAX 10 certification with Chris Brady, author of The Boeing 737 Technical Guide. The freeze may lead to customer loss as airlines like United Airlines may seek other providers due to delivery delays. Boeing aims to fix the anti-ice system by June 2026. Epstein maintains a Neutral rating on Boeing with a $225 price target. Boeing shares are slightly down.
January 29, 2024 | 5:44 pm
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NEGATIVE IMPACT
Boeing faces a production freeze on the 737 MAX by the FAA, which could lead to customer loss and impact future contracts, especially if certification delays continue until 2026.
The production freeze and certification challenges for Boeing's 737 MAX are significant factors that could lead to customer loss and contract issues, negatively impacting the stock price in the short term.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
United Airlines may seek other aircraft providers due to delays in 737 MAX 10 deliveries from Boeing, which could affect their future fleet planning.
United Airlines' consideration of other aircraft providers due to Boeing's delivery delays could indicate potential shifts in their procurement strategy, which may negatively impact their stock in the short term.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
Alaska Air Group's incident with the door plug on the 737 MAX has increased scrutiny on Boeing's certification process, potentially affecting Alaska Air's operations.
While the incident with Alaska Air Group is mentioned as a factor in increased scrutiny on Boeing, the direct short-term impact on Alaska Air's stock is not clear.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 50