Remember back in the days when we were coming out of the pandemic, it was next to impossible to find a lot of things because the “supply chain” was putting a crimp in everything? Supply chain problems are apparently coming back to bite Boeing (NYSE:BA) in the tailfin because the supply chain just prompted a new downgrade for the aircraft manufacturer. Boeing investors weren’t happy, unsurprisingly, and sent the stock down slightly in Tuesday afternoon’s trading.
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Northcoast Research issued the downgrade, turning Boeing from a “neutral” to a Sell. Essentially, analysts at Northcoast noted that Boeing probably won’t be selling a lot more in the way of commercial jets any time soon. That’s mostly because of issues with the worldwide supply chain. Aerospace itself is likely to falter amid several key constraints, starting with the output of jet engines worldwide, as well as the unpredictability of new suppliers entering the field. Northcoast also cited “…mixed-messaging throughout Europe…” as a potential problem.
Interestingly, there are some doubts on this report already. Robert W. Baird analyst Peter Armant revealed there was a “…surge in activity…” in March, as 737 MAX deliveries reached 54 total. Baird actually projects that Boeing will deliver 133 total aircraft in the first quarter. That’s about 10% higher than consensus estimates. Further, Boeing is also on track to meet Baird’s estimates for 2023 deliveries as well. Since Baird looks for about 400 to 450 total aircraft delivered, and Boeing has brought out about a quarter of that, it’s about where it should be.
Northcoast’s pessimistic projections aside, however, most analysts think well of Boeing. Analyst consensus considers Boeing a Moderate Buy, with Buy recommendations running about two to one against Hold and Sell recommendations combined. Further, Boeing stock offers 7.19% upside potential thanks to its average price target of $228.69.
