Boeing shares tumble as more 737 MAX planes are grounded


Southwest Airlines and American Airlines, which analysts said were among the US airlines most exposed to the Boeing aircraft model at issue, saw their shares fall around 2 per cent in afternoon trade.

Boeing shares have delivered a total return – including reinvested dividends – of nearly four times the performance of the full index since US stocks began rebounding from the 2007-09 financial crisis.

At least seven of the 24 analysts covering the stock have reviewed their ratings over the last two days, with two downgrades and one price target cut so far, according to Refinitiv data.

DZ Bank became the first brokerage in nearly two years to place a “sell” rating on the stock, while setting a price target of $US333 – the lowest on Wall Street.

Brokerage Edward Jones also downgraded the stock to “hold” from “buy”, saying the accidents could result in additional expenses, some order delays and pressure financial results.

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The single-aisle 737, the world’s most-sold commercial aircraft, is central to Boeing’s future. The MAX line is the fastest-selling jetliner in the company’s history with more than 5,000 orders booked and a backlog valued at nearly $US500 billion at list prices.

The United States will mandate that Boeing implement design changes by April, but said the plane was airworthy and did not need to be grounded.

Boeing defended its aircraft and said it has “full confidence in the safety of the Max.”

Safety experts said it was too early to speculate on what caused Sunday’s crash and black box recorders were yet to yield the cause.

Reuters

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