Source: Zhitong Finance

On Tuesday, Wells Fargo analysts will$Boeing (BA.US)$The rating was downgraded from “increase holdings” to “hold shares and wait”, and the target price was lowered from $280 to $225. They said the aircraft manufacturer is at greater risk in meeting aircraft delivery targets because US regulators reviewed its factory after the Boeing 737 Max 9 jet experienced an emergency in the air this month.

Wells Fargo analyst Matthew Akers said that Boeing (Boeing) has been struggling with quality issues for some time. What is new is that an external agency is undertaking a more careful review. According to the report, the FAA review was limited to the 737 Max 9, “but the findings may extend the scope to other Max models that share the same components.”

Wells Fargo cut Boeing's target price based on an estimated 16 times Boeing's free cash flow per share in 2025. Analysts lowered their 2024 free cash flow forecast from $6.8 billion to $5.8 billion due to concerns about aircraft deliveries.

Wells Fargo said, “We continue to forecast free cash flow of around $11 billion in 2026 because we see a large amount of potential demand to reach Boeing's target productivity, and Boeing's stock price trend in the fourth quarter shows how fast market sentiment will change as production issues are resolved. However, given the FAA's audit and its comment that 'safety, not speed' determines when the Max 9 will fly again, we expect the solution to be a bit slower this time around.”

Boeing said on Monday that in a 737 Max 9$Alaska Air (ALK.US)$After losing some of the cabin on the flight, it will change quality control; shortly after the plane took off from Portland, Oregon, a doorbell on an unused emergency exit burst, forcing the pilot to make an emergency landing. No one was seriously injured in the accident. As Boeing's best-selling commercial aircraft model, the 737 Max is its main source of revenue.

editor/tolk