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Jan. 17, 2020, 11:05 a.m. EST

Boeing likely to take 'substantial charge' on 737 Max: analyst

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By Claudia Assis

Boeing Co. /zigman2/quotes/208579720/composite BA -3.78% is likely to take a "substantial charge" in the fourth quarter to account for the mounting costs of its 737 Max debacle, analysts at Canaccord Genuity said in a note Friday. The analysts, led by Ken Herbert, lowered their price target on the stock to $350 from $370 and also lowered their sales and profit estimates. The Max production ramp could be slower once the plane returns to the skies, they added. The 737 Max has been grounded worldwide since March following two deadly crashes connected to a faulty anti-stall system, and its return-to-service date has stretched for months. "We are surprised the stock has held up as well as it has considering the company is perhaps facing the most severe crisis in its 100- year history, but we continue to see the financial risk as not fully reflected in the stock," the Canaccord analysts said. Shares of Boeing have dropped 8% in the past 12 months, contrasting with advances of 26% and 20% for the S&P 500 index /zigman2/quotes/210599714/realtime SPX -3.35% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -3.56% .

/zigman2/quotes/208579720/composite
US : U.S.: NYSE
$ 317.90
-12.48 -3.78%
Volume: 5.95M
Feb. 24, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
2.59%
Market Cap
$186.05 billion
Rev. per Employee
$660,961
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/zigman2/quotes/210599714/realtime
US : S&P US
3,225.89
-111.86 -3.35%
Volume: 2.72B
Feb. 24, 2020 4:19p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,960.80
-1,032 -3.56%
Volume: 452.58M
Feb. 24, 2020 4:19p
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