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The 787 problem does not appear to move the needle on long-term cash flows.
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Boeing
they did not deliver any of the 787 wide jets in December. One analyst blames a quality problem the company is working through on the revolutionary vibrating wing pier.
Melius Research analyst Carter Copeland cited the delivery goose egg in a survey report Thursday after he told his institutional investment messengers to ask him what it meant for the stock. “The main topic relates to ongoing structural studies that look to find and correct small gaps in fuselage flight connections within an inventory,” Copeland wrote. “The gaps are reportedly less than the width of a human hair.”
The 787, introduced more than a decade ago, was the first large jetliner incorporating a carbon composite fuselage, replacing the more traditional aluminum. The lighter skin means more efficiency and fuel savings.
Fixing the 787 cases, which Copeland plans to accomplish, means additional costs for the company. Boeing was not immediately available to comment on the extent of the problem or the cost. However, Copeland does not consider it to be a major concern for the stock.
“The 787 cases will certainly make worse than widely expected as an ugly Q4,” the analyst said. “But they are not standing in the way of meeting wider demand. ”It is positive on the stock, ranking Buy shares. It has a $ 260 price target.
The 787 problem does not appear to move the needle on long-term cash flows. And there was some good news in December delivery numbers to consider. Delivered Boeing 27 737 jX MAX. The 737 MAX was re-acquired to fly after about 20 months of being taken down by global aviation authorities following two fatal crashes within five months.
December’s overall delivery, despite 787 absences was better than expected, according to Baird analyst Peter Arment. In addition, he noted that Boeing has about 30 787 aircraft in storage waiting to be delivered and another 40 in a preview test in Charleston, SC
Boeing is set to release fourth-quarter financial results on Jan. 27. Analysts predict a significant loss on sales decline. That will not surprise you. What investors will want is an update to the MAX and other quality issues, along with cash flow management for 2021.
Boeing stock is down slightly so far in 2021. But shares have gained more than 30% over the past three months. The
S&P 500
and
Dow Jones business average
both are up about 9% over the same race.
Aerospace stocks, such as Boeing, have become very sensitive to vaccine news, and vaccine approval has given a boost to the entire region. Aerospace was destroyed last year by Covid-19, the worst event in the history of commercial aerospace. Air traffic in the U.S. on Wednesday was still down about 70% year-over-year.
Vertical Research Partners analyst Rob Stallard explained how bad 2020 was with a whip about 2020 delivery. “Boeing is beating the 1973 delivery delivery,” Stallard wrote after Boeing released delivery.
Boeing stock rose 1.5%, at $ 210.35, at the close of trading on Thursday. The S&P 500 was down 0.1%.
Write to Al Root at [email protected]