Monday saw a reiteration of a Neutral rating and a $170.00 price target for Boeing (NYSE:BA) by BofA Securities. The firm noted that Boeing's operations are showing signs of recovery following the International Association of Machinists and Aerospace Workers (IAM) strike. Over the past week, Boeing has managed to deliver three 737 aircraft, increasing the total deliveries for November to four.
Aero Analysis Partners/AIR (AAP/AIR) has observed an uptick in pre-delivery flight activities for the 737 model, with expectations of three more deliveries before the end of November. The overall flight activity for Boeing has also seen an increase, with 42 flights recorded last week. This accounts for over half of the total flights for the month.
In addition to the rise in flight activities, 737 production is also showing signs of rebounding. Approximately 14 rollouts of the 737 model have been identified in November. It is believed that around nine of these aircraft were completed in September but their rollout was delayed due to the strike, causing them to remain in the Final Assembly Line.
The recent developments suggest a positive shift in Boeing's production and delivery process post-strike. The IAM strike had previously impacted Boeing's operations, but with the delivery of new aircraft and increased flight activity, there is evidence of a gradual return to normalcy in the company's manufacturing operations.
In other recent news, Boeing's production and delivery rates have been affected by a reported slowdown in 737 output and a recent strike. The company's 737 production is experiencing sluggishness, according to Aero Analysis Partners/AIR, with no new rollout activity observed this November. This coincides with Boeing's statement that it will take several weeks for production to fully ramp up after workers returned. BofA Securities maintained a Neutral rating and $170.00 price target on Boeing in light of these developments.
Boeing also reported a significant drop in commercial jet deliveries due to the strike, with only 14 aircraft delivered in October. Despite these setbacks, the aerospace giant managed to report 63 gross orders in the same month with no cancellations. To aid in the recovery, Boeing provided Spirit AeroSystems (NYSE:SPR), a key supplier, with up to $350 million in advance payments.
In terms of leadership, Boeing has added Tim Buckley, former Chair and CEO of The Vanguard Group, to its Board of Directors. This is part of an ongoing initiative that has introduced ten new directors since 2019.
Jefferies, a global investment banking firm, maintained its Buy rating and $200 target for Boeing, noting the strength of Boeing's order book despite geopolitical tensions and market uncertainties. The firm anticipates that the Boeing 737 MAX order book will be approximately 20% higher than Jefferies' own forecast for the years 2025 to 2027.
As Boeing prepares to restart production of its 737 MAX aircraft, the Federal Aviation Administration (FAA) announced its intention to increase oversight to ensure adherence to its safety risk management system.
InvestingPro Insights
As Boeing shows signs of recovery post-strike, InvestingPro data provides additional context to the company's current financial position. Boeing's market capitalization stands at $114.31 billion, reflecting its significant presence in the aerospace industry. However, the company faces some challenges, as highlighted by InvestingPro Tips.
One InvestingPro Tip indicates that Boeing "may have trouble making interest payments on debt," which could be a concern as the company works to ramp up production and deliveries. Additionally, another tip notes that Boeing "suffers from weak gross profit margins," which is evident in the company's gross profit margin of just 3.62% for the last twelve months as of Q3 2024.
Despite these challenges, Boeing remains a "prominent player in the Aerospace & Defense industry," according to another InvestingPro Tip. This aligns with the company's efforts to recover and increase deliveries, as mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide valuable insights into Boeing's financial health and future prospects.
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