Financial Analysts Forecast Bleak Future for Boeing
Financial analysts are concerned about the future of Boeing after two years of financial hardship. Boeing has struggled financially as a result of the. international grounding of the 737 Max fleet and the ongoing coronavirus pandemic.
According to a report by the Street, financial analysts are forecasting a downward trend in the price of Boeing stock due to multiple factors that have hindered the manufacturer’s growth over the past two years.
Bernstein analyst Douglas Harned argued that low sales of the Boeing 787 fleet have led to decreased financial expectations for the largest American aircraft manager.
“Recently, the 787 has come under more pressure, which we do not believe the market fully appreciates.” Harned said, “we lower our 2020-21 free-cash flow estimates.”
Harned attributed Boeing’s weak forecast to the lack of aircraft deliveries in November and December. “This did not happen. We saw only one delivery in December and none in November. It appears non-conformities related to the fuselage are more extensive than originally thought. Delivery delays continue to stretch out,” Harned added.
Although the 737 Max recently returned to the airways after a lengthy hiatus, analysts are now concerned about issues with the 787 fleet.
“We estimate 787 issues could significantly hurt free cash flow through cost of repairs, compensation to customers, timing of engine cash payments, and less operating leverage,” Harned finished.
Breitbart News reported this week that Amazon recently passed Boeing to become the largest employer in the state of Washington.
“Boeing and Amazon are such stark contrasts. It’s two models of the U.S. economy, one based around manufacturing, one around consumption,” one labor analyst said. “It’s fascinating that Seattle has been headquarters for both of them.”
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