Boeing Co (NYSE: BA) has been in an uptrend since early December but that could reverse moving forward, says Chris Olin. He’s a Senior Analyst at Northcoast Research.
Boeing stock could sink to $180
On Tuesday, Olin downgraded the aerospace and defense company to “sell” and said its shares could tank to $180 – more than a 15% downside from here.
The dovish view on Boeing stock is based primarily on supply constraints that the analyst says will stand in the way of this company increasing its output of commercial jets.
After communicating with high-level industry contacts, we can now see several turbulence blips on the radar screen with darker clouds forming around the aerospace bellwether peer group.
Olin is not convinced that the Arlington-headquartered firm will be able to lift 737 deliveries to 38 per month this summer. In January, Boeing posted a surprise loss for its Q4 as Invezz reported HERE.
Boeing to remain in loss this year
Northcoast Research now expects Boeing Co to lose $1.74 per share in 2023. Olin is particularly concerned that CFM International will fail to make sufficient deliveries of its LEAP engines to Boeing.
Recent channel checks reveal rising level of contract anxiety, lagging engine output and future supply chain destabilization. Stage looks nearly set for 1H23 engine delivery disappointment and subsequent adjustment to 737 production schedules.
The multinational is scheduled to report its monthly order and delivery update next week. Just days ago, Qatar Airways said it’ll take Boeing 737 MAX 8s that were originally ordered by Russia’s S7.
Versus the start of the year, Boeing stock is up about 8.0% at writing.
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