Boeing Co B.A Shareholders have grappled with headache after headache over the past few years, and the company recently added another disappointment to the list when it announced more manufacturing flaws were emerging on the 737 Max will reduce production.
On Monday, Bank of America analyst Roland Epstein said he remains on the sidelines on Boeing shares as the company continues to stumble over its own feet.
Latest Issues: The most recent production issues on the 737 MAX relate to two of the eight fittings that hold the vertical stabilizer to the fuselage. Estimates of the cost of fixing these issues ranged from $70,000 per plane to $1 million per plane, Epstein said. Unfortunately, since Boeing chose not to file an 8-K with an official update for investors, Epstein said Wall Street must speculate.
Related link: Southwest Airlines faces heat from Boeing’s 737 MAX manufacturing failure
How did this happen? The good news for Boeing investors is that fixing the production issue should be relatively quick and easy. However, the fact that this problem arose in the first place is very strange, says Epstein.
“We, the investor community, have been told that the MAX is one of the most well-vetted aircraft in history given its effective FAA recertification. Is it the fault of Boeing, the FAA, or the supply chain, or all three?” Epstein said.
Boeing’s troubles began in 2019 when the company was forced to ground the 737 MAX after two deadly crashes. Production and quality control issues have plagued the company ever since, and Epstein says Boeing has been his own worst enemy.
Bank of America has a “neutral” rating and a price target of $225 on Boeing.
Related link: NASA turned him down so he could build his own billion-dollar rocket company
Gasoline Gas Take: Ironically, Boeing was once one of the most reliable and predictable blue chip Aerospace and defense stocks in the market. There’s certainly value to Boeing’s…
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