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Boeing to Halt 787 Production Amid Structural Problems – Report
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Boeing to Halt 787 Production Amid Structural Problems – Report

Shares of aerospace giant Boeing Co. (BA) dipped more than 2% in early trading on Tuesday following a production halt of its 787 Dreamliner.

As per a Reuters report, The FAA reported manufacturing quality issues with the undelivered 787 Dreamliner while undertaking a system-wide inspection of Boeing’s 787 shimming processes.

The FAA stated that the problem detected is near the nose of some of the planes and does not possess any immediate threat to flight safety. However, Boeing has committed to fixing the issue before sending the aircraft out for delivery.

The company said, “the 787-production rate will temporarily be lower than five per month and will gradually return to that rate. Boeing now expects to deliver fewer than half of the 787s currently in inventory this year.”

To date, Boeing has delivered 156 commercial planes, with 79 deliveries in the second quarter. (See Boeing stock charts on TipRanks)

Boeing has lately come under a lot of regulation due to a series of defects, resulting in delays of the company’s scheduled aircraft deliveries. The company has around 100 undelivered 787 Dreamliners in inventory.

Today, Wolfe Research analyst Hunter Keay upgraded the stock to a Hold with a price target of $224, implying 3.4% downside potential to current levels. Keay admits that Boeing has some issues but believes an improving book-to-bill throughout 2021 will help boost the company’s performance.

The stock has an overall Moderate Buy consensus rating based on 9 Buys and 8 Holds. The average Boeing price target of $270.87 implies 17.2% upside potential to current levels. Shares gained 35.7% over the past year.

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