© Reuters
Investing.com – BofA Securities has cut its 12-month price target for Boeing (NYSE:), saying the aircraft maker faces operational and reputational risks but that demand remains strong over the long term.
BofA Securities, the investment banking division of Bank of America, hosted Brian West, Boeing's chief financial officer, at a conference Wednesday, seeking information on the near-term impact of ongoing 737 developments on production. , deliveries and free cash flow.
As a result, BofA lowered its price target to $210 from $225, maintaining its “neutral” rating.
At 09:50 ET (1350 GMT), Boeing shares were trading 0.2% higher at $188.21, down nearly 30% so far this year.
“We believe that financial objectives will necessarily have to fall back on compliance, security and quality assurance,” analysts at the bank said, in a note dated March 21.
“We reduced our FCF estimates to reflect operational and customer penalties due to a delayed and highly scrutinized production ramp-up of the 737.”
Boeing's latest problem occurred in January when a cabin panel explosion forced an Alaska Airlines flight to make an emergency landing.
U.S. regulators briefly grounded certain planes for safety checks, a less severe measure than the grounding of all MAX family planes worldwide nearly five years ago after a pair of fatal crashes.
That said, BofA noted that the civil aviation market remains strong and that Boeing is a key player in the sector.
