Boeing Stock (NYSE:BA)
On Wednesday, Wells Fargo Securities analysts predicted that the delay in 787 Dreamliner deliveries would have little impact on Boeing’s (NYSE:BA) cash flow this year.
The manufacturer said Monday that it will reduce widebody aircraft deliveries in the coming weeks due to a problem with the planes’ horizontal stabilizers. Boeing stock has said that the defect does not threaten passenger safety.
Wells Fargo analyst Matthew Akers said in a research published on June 7 that “with full-year deliveries and production unchanged, full-year cash impact is likely limited to the added cost of inspections, which [we] believe is minimal.”
If Boeing doesn’t deliver 787s in June, the bank predicts around $500 million of cash flow might move from the second to the third quarter.
Wells Fargo estimates that the U.S. Federal Aviation Administration has issued roughly 60 airworthiness directions for Boeing (BA) aircraft in the last year, a small percentage given the plane’s estimated 2.3 million components and the statistical likelihood of a flaw. When an aircraft, engine, propeller, or other product is found hazardous or potentially harmful, the governing body releases regulations to address the problem.
Wells Fargo claims that most of these “directions” apply to “non-critical items,” which may be ignored if periodic maintenance is ignored. Although aggravating, these problems are not the same as the 787 composite material faults that delayed delivery until 2021 and 2022.
Boeing fixed manufacturing and regulatory problems due to increased scrutiny of its jets to resume 787 deliveries in August last year. Within five months of each other in 2018 and 2019, two of its 737 Max jets crashed, killing hundreds of people. This prompted authorities to rethink how they deal with deviations from authorized designs and federal standards.
Wells Fargo predicted that Boeing stock will generate much cash in the next years due to the company’s increasing production rate, more mature program mix, and lack of new aircraft development.
New orders for Boeing (BA) and European competitor Airbus (OTCPK:EADSY) (OTCPK:EADSF) are often featured during the Paris Air Show, which this year begins on June 19. Wells Fargo predicts that once Chinese airlines resume flights after the end of pandemic lockdowns, Boeing might see a restart in 737 Max deliveries to the nation.
Featured Image: Megapixl
Author Shariq Khan 
