Boeing shares dip again as 737 MAX groundings spread
- Malaysia, Singapore and Australia also grounded the plane. The same model was involved in another fatal crash in Indonesia in October.
- Boeing’s stock fell 3.2 to $387.10 minutes after the opening bell on Tuesday, adding to a 5 percent decline on Monday
Boeing Co’s stock losses mounted to more than $20 billion in two days as more countries including the United Kingdom grounded the planemaker’s 737 MAX 8 aircraft on Tuesday following the deadly crash of a Nairobi-bound Boeing 737 MAX 8.
British Civil Aviation Authority said it was banning 737 MAX commercial flights from UK airspace as a precautionary measure.
Malaysia, Singapore and Australia also grounded the plane. The same model was involved in another fatal crash in Indonesia in October.
Boeing’s stock fell 3.2 to $387.10 minutes after the opening bell on Tuesday, adding to a 5 percent decline on Monday.
Since the Ethiopia crash, at least seven of the 24 analysts covering the stock have reviewed their ratings, with two downgrades and one price target cut so far, according to Refinitiv data.
DZ Bank became the first brokerage in nearly two years to place a “sell” rating on the stock, while setting a price target of $333 – the lowest on Wall Street.
Brokerage Edward Jones also downgraded the stock to “hold” from “buy”, saying the accidents could result in additional expenses, some order delays and pressure financial results.
“On whether Boeing is responsible in some way or if there is a problem in its aircraft is something investors are still trying to digest,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
The United States will mandate that Boeing implement design changes by April, but said the plane was airworthy and did not need to be grounded.
Safety experts say it is too early to speculate on what caused Sunday’s crash and black box recorders were yet to yield the cause.
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