Boeing and Spirit AeroSystems 'lows should be set prior to return to service' - Wolfe Research
Analysts at Wolfe Research said in a note Friday that the Boeing (NYSE:BA) and Spirit AeroSystems (NYSE:SPR) «lows should be set prior» to the return to service of the MAX 9.
Analysts, who have an Outperform rating and $280 per share price target on Boeing shares, told investors that the MAX9 situation is fluid, but their firm's thinking is consistent with initial thoughts from Sunday.
«The incremental discovery since Sunday is prevalence of non-compliance (by UAL andALK) in the door plug hardware,» they explained. «We don't think this changes the solution of return to service (tighten hardware), but clearly deserves higher headline risk scrutiny (FAA investigation of QC; Congressional hearing risk, etc) and a bit longer on the RTS.»
«On a positive, the FAA approved MAX deliveries this week illustrating that not just economists are two-handed,» the analysts added.
The analysts noted that potential risk appears off the table as BA delivered a 737MAX8 (with FAA sign-off). «How, if at all, the MAX9 incident will impact the ongoing certification process for the MAX7/10 and the China decision to restart MAX deliveries (they have no MAX9s in backlog) remain questions,» they acknowledged.
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