The Federal Aviation Administration (FAA) has asked the operators of Boeing (BA) 737 airplanes to inspect and address the issue of failure of cabin altitude pressure switches, according to a report by Reuters.
As per the FAA’s directive, operators need to test the switches repeatedly and replace them if required. The directive includes 9,315 airplanes worldwide and 2,502 planes registered in the U.S.
The failure of the cabin altitude pressure switches could decrease oxygen level in the planes, the FAA said. Shares of the company sank 2% in pre-market trading on Monday. (See Boeing stock chart on TipRanks)
Meanwhile, Boeing said it supported the FAA’s direction, which makes mandatory the inspection interval that it issued to the fleet in June.
Last week, Bank of America Securities analyst Ronald Epstein reiterated a Hold rating on the stock with a price target of $265 (21.7% upside potential). The analyst said, “The company is still clearly facing some company-specific challenges as the global airline industry recovers from the pandemic.”
Overall, the stock has a Moderate Buy consensus based on 9 Buys and 8 Holds. The average Boeing price target of $272.76 implies 25.3% upside potential. The company’s shares have gained 24.8% over the past year.
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