Boeing may face billions more in losses as MAX crisis deepens: analysts
Ankit Ajmera
(Reuters) - Boeing Co (BA.N) may have to book billions of dollars in additional charges related to its grounded 737 MAX jets, brokerages said on Monday, following reports that call into question the timing of the aircraft’s return to service.
Credit Suisse and UBS downgraded the stock after reports on Friday showed internal messages between two Boeing employees stating that the plane’s anti-stall system behaved erratically during testing before the aircraft entered service.
The new revelations pose fresh challenges for Boeing, which is reeling under pressure after two fatal crashes forced the company to ground the planes and book billions of dollars in losses.Boeing's shares fell as much as 5.7% to $324.40 in early trading on Monday, making the stock the biggest percentage loser on the Dow Jones Industrial Average. They have lost 18% of their value since the second deadly crash of the popular single-aisle jet in March.
The planemaker has already cut production of the MAX, and analysts said there was an increasing possibility that the company would have to halt production altogether.
“We see increasing risk that the Federal Aviation Administration won’t follow through with a certification flight in November and lift the emergency grounding order in December,” UBS analyst Myles Walton said, downgrading the stock to “neutral” from “buy”.
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