Wolfe Research Offers Thoughts on Boeing's (BA) Engine Failure Issue
- Wall Street ends week positively; S&P 500, Dow hit record highs
- Bitcoin (BTC) Drops 3% as Turkey Bans Cryptocurrency Payments Citing Lack of Regulatory Supervision
- Morgan Stanley (MS) Archegos-Related Loss Appears to be $911M
- Dollar at 4-week low on retreating Treasury yields
Get instant alerts when news breaks on your stocks. Claim your 1-week free trial to StreetInsider Premium here.
Wolfe Research analyst Hunter Keay reiterated an Underperform rating and $165.00 price target on Boeing (NYSE: BA) after a UAL 777-200 suffered an uncontained engine failure soon after departing DEN on the way to Hawaii. The PW4000 was manufactured by UTX (now RTX) until 2017 and is/was used on many WB aircraft (747, 777, 767, A330, others) but this AD only applies to the PW4000-112 models used on 777-200 variants. The average age of the 128 B777-200 aircraft powered by PW4000 engines is high, at 20 years.
The analyst stated "Globally, there are 128 B777s that are impacted by this issue (69 in service, 59 in storage). Given there are 1,926 stored WBs on a global basis, airlines shouldn’t have trouble replacing lost capacity, assuming they want to." "It’s hard to know what happens next but we expect more information over the next 1-2 days. Obviously weak air travel demand means the global aviation industry can move slowly on this issue. And recent manufacturing issues on the MAX and the 787 should drive particularly cautious approaches by the FAA and aerospace OEMs. If this is a more serious issue it might accelerate WB-oriented decisions for UAL, who has 49 WB aircraft on order. It could simply just accelerate the exit of these 128 aircraft from the global fleet."
Shares of Boeing closed at $210.83 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Boeing (BA) Forecasts Sufficient Capital for Aviation Finance
- Hana Financial Group (086790:KS) PT Raised to KRW51,000 at Morgan Stanley
- Inspections Reveal Wider Electrical Grounding Problems In Parts Of Some Boeing (BA) 737 Max Jets - Reuters