BofA Cuts Boeing Target On Higher Risk Profile

Boeing Co BA could face several “unexpected” challenges in the near term, according to BofA Securities.

The Boeing Analyst: Ronald Epstein reiterated a Neutral rating on Boeing, while trimming the price target from $180 to $150.

The Boeing Thesis: China Southern Airlines Co Ltd ZNH has removed more than 100 737 MAX jets from its delivery plan, Epstein said in the note.

Ryanair Holdings plc RYAAY has also “joined the list of Boeing’s displeased customers,” he added.

“Simply stated, if the 737-Max 10 and Max 7 aren’t certified this year and the 787 does not start deliveries again, one airplane line, the 737-Max 8, is not enough to feed Boeing,” the analyst wrote.

“Boeing is confronted with losing market share in the narrowbody jet market, refocusing the company on engineering excellence and deleveraging its balance sheet,” Epstein stated. He added that commercial aviation is likely to return to the 2019 air traffic levels in 2024 and that the recent 737 MAX groundings could “lead to more than 2 years of disruption.”

BA Price Action: Shares of Boeing had risen by 5.69% to $131.49 at the time of publication Tuesday, according to Benzinga Pro.

Photo: Courtesy of LoadedAaron on Flickr