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Boeing Hasn’t Delivered…on Jets or Other Requisites for Recovery

At this point, Boeing’s task is simple—it needs to stop the bleeding.

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Boeing’s badly beaten-up stock might be nearly as weak as it will get.

When Barron’s recommended Boeing
on Aug. 13, it was predicated on three things happening: CEO Dave Calhoun needed to prioritize engineering, build a new plane, and sell more stock to fix the balance sheet. None of that has happened, and the shares (ticker: BA) are down 44% since then.

The big drop, however, seems to have attracted some interest in Boeing shares recently. “The decline in Boeing’s stock price has prompted continued questions from investors,” wrote J.P. Morgan analyst Seth Seifman in a note.

At this point, Boeing’s task is simple—it needs to stop the bleeding. For that to happen, the company needs to deliver more 737 MAX jets to customers and win permission to resume deliveries of the 787 twin-aisle jet, explains Seifman. “This will help generate cash, reduce working capital, and begin the delevering process,” he writes.

The MAX, which returned to commercial service in November 2020 after about 20 months on the ground following two deadly crashes inside of five months, needs China to reapprove the plane for commercial service. Boeing is also waiting for the Federal Aviation Administration to approve the 787 before deliveries can restart.

Seifman believes any other problems that the company faces will look smaller once deliveries ramp up.

At this price, they’d better.

Write to Al Root at [email protected]

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