Boeing Analysts Recommend Caution Following Latest 787 Production Problems

Boeing Co BA shares dropped 4.8% on Friday after the company announced it had once again run into production problems with its 787 Dreamliner.

What Happened: On Thursday, Boeing said it halted 787 deliveries to conduct further analysis of the fuselage quality issues discovered last year.

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Why It's Important: Boeing had just resumed 787 deliveries in August 2022 following a two-year halt to address manufacturing flaws. Boeing delivered just 34 787s since August and had not made any deliveries of the aircraft since Jan. 26.

The Federal Aviation Administration must sign off on the 787 before Boeing can resume production.

Bank of America analyst Ronald Epstein said Thursday that the latest news will further frustrate Boeing's suppliers with more delivery timeline uncertainty.

"Continued production delays and delivery halts impacting existing inventory raise concerns about Boeing’s ability to meet demand and stabilize the company’s production lines," Epstein said.

Related Link: Boeing Once Again Suspends Deliveries Of 787 Dreamliners: What You Need To Know

Fortunately for investors, Boeing reportedly had roughly 100 fully-built 787s.

Boeing's new production halt did not change Epstein's full-year 787 delivery forecast for 76 planes.

Bank of America had a Neutral rating and $225 price target for Boeing.

Morgan Stanley analyst Kristine Liwag said Friday that Boeing shares have limited upside given its ongoing production problems.

"In our view, this issue highlights that regulatory risks remain for Boeing," Liwag said.

Morgan Stanley had an Equal-Weight rating and a $220 price target for Boeing.

Benzinga's Take: At this point, Boeing investors are growing impatient with a seemingly never-ending stream of production problems with the 737 MAX and the 787 Dreamliner since 2019.

Boeing's core business and demand remain strong, but there's no question its brand value had taken a hit in the past three years.

Photo: Courtesy Boeing