The Federal Aviation Administration (FAA) has put brakes on Boeing’s (NYSE:BA) production expansion of the MAX, including the 737-9 MAX. As a result, BA stock fell over 2% in the pre-market session on Thursday. The regulatory authority has communicated to Boeing that it will not approve any production expansion for the MAX planes.
Boeing is the leading manufacturer of commercial airplanes, space systems, and defense products.
This move comes amid the FAA’s ongoing investigation and increased supervision of Boeing and its suppliers following an event on an Alaska Airlines (NYSE:ALK) flight where a part of the plane detached mid-flight. After the incident, the regulatory body grounded 171 Boeing 737-9 Max planes.
Nonetheless, the FAA has announced that the Boeing 737-9 Max planes will soon be cleared for service again, subject to a comprehensive inspection and maintenance process that must be conducted on each of the grounded 737-9 MAX planes. Notably, BA stock has dropped about 14% since the Alaska Airlines incident on January 5.
What is the Prediction for Boeing Stock?
While the halt on production expansion is a negative development, Wall Street analysts maintain an optimistic outlook on BA stock due to the solid commercial demand and increased deliveries.
Boeing stock has a Strong Buy consensus rating based on 18 Buy and five Hold recommendations. The average BA price forecast of $272.05 implies a 27.05% upside potential from the current levels.
