TLDR
- Boeing stock fell 2.4% to around $197, on trading volume 77% above its daily average
- CEO Kelly Ortberg confirmed 737 MAX production stabilization is taking longer than expected due to wing bottlenecks and engine delays
- Korean Air placed a record 103-aircraft order worth roughly $36.2 billion, and the FAA approved 35 additional 777F freighter sales
- Boeing’s expected China order of 200 aircraft did not materialize, removing a near-term catalyst
- Analysts hold a consensus “Moderate Buy” with an average price target of $272.58; BofA calls the selloff an overreaction
Boeing (BA) dropped 2.4% on Thursday to around $197, closing out a rough week for the planemaker. Volume hit 11.7 million during mid-day trading, up 77% from its daily average, suggesting the move wasn’t just noise.
The catalyst? CEO Kelly Ortberg told investors at a conference that getting the 737 MAX to a stable production rate of 47 aircraft per month is taking longer than expected. Wing-production bottlenecks at the Renton facility, plus engine delays and outstanding certification hurdles, are all slowing the ramp.
That’s a problem because Boeing’s $10 billion cash-flow target depends heavily on getting more planes out the door faster. Slower deliveries mean delayed customer payments and slower inventory reduction.
Adding to the disappointment, the anticipated order from China for around 200 aircraft didn’t come through. Ortberg clarified that no such deal was struck, cutting short what had been a source of optimism heading into the week.
Orders Offer Some Relief
It wasn’t all bad news. Korean Air finalized a record order for 103 Boeing aircraft valued at roughly $36.2 billion at list prices. The deal covers 777-9s, Dreamliners, 737-10s, and freighters, adding solid weight to Boeing’s long-term commercial backlog.
Lufthansa also reportedly agreed to take 20 additional 737 MAX 10 jets. On the cargo side, the FAA issued a waiver on emissions rules, clearing Boeing to sell 35 more 777F freighters after 2028.
Boeing also flagged reported interest in up to four 777-8F freighters and a 757-200PCF lease. The 777X program still targets first deliveries in 2027, and an expanded KC-46 contract ceiling gives some comfort on the defense side.
What Analysts Are Saying
Wall Street isn’t panicking. The consensus rating sits at “Moderate Buy” with an average price target of $272.58, well above where the stock is trading.
BofA analyst Ronald Epstein called the earlier 7% intra-day drop this week “a bit dramatic,” noting Boeing’s turnaround was never going to be a straight line. He reiterated a Buy rating and a $270 price target.
Not everyone is as upbeat. Wolfe Research downgraded Boeing from “Outperform” to “Hold” in August. Weiss Ratings maintained a “Sell” rating. Royal Bank of Canada trimmed its target from $275 to $265 while keeping an “Outperform” call.
Boeing’s financials remain stretched. The debt-to-equity ratio stands at 6.77, the quick ratio is just 0.33, and the company missed its last quarterly EPS estimate by $0.42, reporting a loss of $0.76 per share versus the expected $0.34 loss.
BofA flagged what it sees as the more pressing near-term risk: a potential strike by the SPEEA engineering union, with the current contract expiring on October 6.
The stock’s 50-day moving average sits at $217.12, and the 200-day at $218.63, both well above the current trading price.
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