It’s one step forward and two steps back for aircraft giant Boeing (NYSE:BA) as it finds itself drawing the ire of airlines. The newest reports suggest that United Airlines (NASDAQ:UAL) might be on the outs with Boeing, and that was enough to send Boeing shares down fractionally in Tuesday morning’s trading. The latest reports note that United may decide to drop the 737 Max 10 thanks to an array of factors, starting with an overall delay in releasing the Max 10 and the grounding of 737 Max 9 jets following that near-disaster on an Alaska Airlines flight.
United wasn’t pleased that the Max 10 was already five years or more delayed, and the Alaska Airlines mess was just unpleasant icing on an already inedible cake. Throw in the fact that the Max 10 hasn’t yet been certified for use by the Federal Aviation Administration, and that only makes the situation worse.
And Indeed, It Gets Worse
Of course, it also doesn’t help when the Secretary of State is briefly stranded in Switzerland after his own Boeing 737 suffered a “critical failure” connected to an oxygen leak in the aircraft. Granted, his stranding didn’t last long, but when a major government figure is stuck at a meeting because of a mechanical failure just days after a previous mechanical failure literally tore a shirt off a kid’s back in mid-flight, it doesn’t bode well for future aircraft sales. Something needs to change at Boeing, and quickly. When Delta (NYSE:DAL) lost ground after holding on to its Boeing order just four days ago, it’s starting to look like Boeing is share price poison for airlines.
What is the Fair Value of Boeing Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 18 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 0.55% rally in its share price over the past year, the average BA price target of $272.80 per share implies 28.02% upside potential.
