By Christopher Hinton, MarketWatch
NEW YORK (MarketWatch) -- After years of setbacks and delays, Boeing investors and analysts are feeling confident that the jet maker will finally get its game-changing 787 Dreamliner into the air by the end of the month, possibly as early as next week.
The jumbo jet, built with advanced composite materials to make it lighter and more fuel efficient, has fallen two years behind schedule as management worked out kinks in its supply chain and weakness in its structure. First deliveries are now scheduled for the fourth quarter of next year.
Over the last month, Boeing /zigman2/quotes/208579720/composite BA +1.01% has reinforced the 787's airframe and subjected the plane to an important load test currently under analysis. Meanwhile the jet has been able to taxi across the runway under its own power and crucial system tests are being completed.
"I do think they will make the deadline" for the first flight, said Wall Street Access analyst David Silver. "I think it will be next week."
Investors are expecting it too, pushing Boeing shares up some 16% since the beginning of November. Most recently the stock rose nearly 2% to $55.61.
Shares aren't likely to climb much higher, analysts said, because a successful first flight is pretty much priced in. They also cautioned that short-term risks remained.
"The stock could see a knee-jerk reaction if [the 787] doesn't fly next week, but it will come back," Silver said.
How bad of a hit will depend on why it was delayed and for how long, he said. A minor problem with an easy fix is one likely scenario, but any additional structural issues would be more significant.
Furthermore, the plane's implied certification schedule is aggressive, so there is little room for error, analysts said.
"Computer problems are a typical issue," Silver said. "There could be some minor problem with the computer and that will cause a three month delay for its mass production."
Airbus took about five months to work out the glitches in its A380 computer system, Silver said.
Boeing has said the 787 will fly by year's end, but rumors are circulating that the jet will be in the air by next week. According to Jim Ostrower at FlightBlogger, sources inside the company said the maiden flight was recently moved from Dec. 14 to Dec. 15, while the Seattle Times reported the plane will launch Dec. 18, up four days from an earlier forecast of Dec. 22.
"Like a slowing pendulum, the amplitude of the swings identifying 787's first flight date are narrowing...and changing daily," Ostrower reported on his Web site.
Boeing would not comment on the rumors, but the company is certainly keen to secure plenty of publicity for the maiden flight when it occurs.
"It feels like the date is pulling forward," said Cowen & Co. analyst Cai von Rumohr. And since the launch date appears to be moving forward, that likely means the results of the static load test look positive.
"Whether it's the 14th, 15th, 16th, or 18th shouldn't be a big deal," von Rumohr said. "They get it up for an hour or so and then they come down. This should be relatively straightforward."
But von Rumohr was also cautious on the stock, noting initial profitability from the 787 program will be low because of the delays, and that Boeing faces heavy working capital needs over the next three to four quarters.
Instead of Boeing, von Rumohr recommended investors get into to the stocks of companies that supply it with parts and equipment, such as Rockwell Collins Inc. , Precision Castparts Corp. and Moog Inc. /zigman2/quotes/209198540/composite MOG.B +4.13% /zigman2/quotes/210100990/composite MOG.A +0.13% .
"They will have positive cash flow this year and next, and Boeing won't," von Rumohr said. "They are also likely to make good money [when the 787 launches], but if it fails, they will lose less money."