Boeing Co. is likely to take a “substantial charge” in the fourth quarter to account for the mounting costs of its 737 Max debacle, analysts at Canaccord Genuity said in a note Friday. The analysts, led by Ken Herbert, lowered their price target on the stock to $350 from $370 and also lowered their sales and profit estimates. The Max production ramp could be slower once the plane returns to the skies, they added. The 737 Max has been grounded worldwide since March following two deadly crashes connected to a faulty anti-stall system, and its return-to-service date has stretched for months. “We are surprised the stock has held up as well as it has considering the company is perhaps facing the most severe crisis in its 100- year history, but we continue to see the financial risk as not fully reflected in the stock,” the Canaccord analysts said. Shares of Boeing have dropped 8% in the past 12 months, contrasting with advances of 26% and 20% for the S&P 500 index and the Dow Jones Industrial Average .Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
Latest posts by Market Watch (see all)
- NewsWatch: Businesses get bigger butterflies over coronavirus and that’s not good for the economy - February 22, 2020
- Gold breakout’s while the stock market is rising should concern investors - February 22, 2020
- IMF lowers global economic growth forecast, warns of ‘more dire scenarios’ - February 22, 2020