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Jul 19, 2019

Boeing shares shake off concerns over 737 Max charge

Boeing takes nearly US$5 billion charge on 737 Max

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Shares of Boeing Co. (BA.N) are climbing in early trading after a US$4.9 billion charge on the grounding of the 737 Max jets met some expectations on the Street.

The charge “is a positive”, and met Morgan Stanley analyst Rajeev Lalwani’s expectations. Lalwani was also optimistic about the tentative promise of the jetliners’ return to the skies ahead of some investors estimates, as well as the 2020 production goals, he told clients in a research note.

As one of Boeing’s biggest bulls, with a buy rating and a Street-high price target of US$500, Lalwani expects “a re-start of the upward narrative” for the stock.

Citi analyst Jonathan Raviv was more cautious, writing in a note to clients that “accounting assumptions shed some light, but it ain’t over.”

Raviv called the charge neutral to positive, but added that it didn’t reflect knowledge of what steps the Federal Aviation Administration may take.

Boeing shares are up 2.1 per cent to $368.50 in early trading, recouping most of yesterday’s 2.3 per cent decline.