It never merely rains at aerospace company Boeing Co. (BA) but always seems to pour. New reports suggest that Boeing may face more delays in building new jets thanks to an engine issue.
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The latest issue started back in 2023 after a bird hit an engine not long after a Southwest Airlines (LUV) flight took off from Cuba. This might not ordinarily be a problem, but when the cabin started filling with smoke, it prompted an emergency landing. That was in March of 2023, and another bird / engine collision in December 2023 produced similar results.
Boeing brought out a bulletin in February that advised airlines about the issue, but that was not enough for the Federal Aviation Administration (FAA), which brought together a review board to address the matter. A temporary solution—turning off airflow from the engines in the event of a bird strike—would be put in place. But Boeing may be required to establish a “permanent solution” that could further delay the 737 Max 7 and Max 10 certifications.
“We Can’t Afford Another Mistake”
Separately, remember yesterday’s harangue from Boeing CEO Kelly Ortberg? It was about how tired he is of hearing about what’s wrong with his company? Ortberg also called attention to “…bloated management ranks, wasteful spending and a culture of infighting and shirking responsibility.”
There is one plus. Boeing just landed two new government contracts for 15 KC-46A Pegasus tankers and seven P-8A Poseidon maritime surveillance aircraft. The combined value of the two deals comes in at more than $4 billion, which should help address Boeing’s cash crunch.
Is Boeing a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, six Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 31.89% loss in its share price over the past year, the average BA price target of $193.62 per share implies 29.36% upside potential.
