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Important points
- Boeing shares fell more than 4% on Tuesday after major airlines expressed concern about delivery issues with the struggling plane maker.
- The company delivered 17 narrow-body Max jets last month, eight fewer than in January and about half the amount it shipped in November and December.
- Boeing stock could find chart support near the 18-month horizon at $174.
Shares of troubled aircraft maker Boeing (BA) fell more than 4% on Tuesday. This comes as the company’s stock continues to be weighed down by a series of highly publicized safety incidents and production slowdowns due to manufacturing defects.
Recent announcements from major airlines have put a spotlight on Boeing’s slow delivery of planes. Low-cost carrier Southwest Airlines (LUV) said Tuesday it plans to cut capacity and review its revenue outlook after lower-than-expected deliveries from aircraft manufacturers.
Perhaps more troubling for Boeing shareholders, United Airlines (UAL) CEO Scott Kirby told analysts at Tuesday’s J.P. Morgan Industrial Conference that the airline faces certification uncertainty. In a related move, the airline said it is considering ordering rival Airbus (EADSY)’s A321neo aircraft to replace the Boeing 737 Max 10 it had previously ordered. to production and quality issues.
“I would like to see them delivered, but this is not a 12-month issue,” Kirby said of the airline’s orders with Boeing. “This is a 20-year problem,” he added.
The airline originally ordered 151 Max 10s to be delivered over the next two years, but recently removed those jets from its fleet due to Boeing’s production challenges. United currently operates six A321neos and has 174 on order.
Boeing Co. comes under increased scrutiny from the Federal Aviation Administration (FAA) after a series of safety incidents and production defects, most notably a blown door plug on a MAX 737 operated by Alaska Airlines. The company has scaled back production of its best-selling 737 MAX aircraft for months. Airline (ALK), in flight in January.
The company said it delivered 17 narrow-body Max jets last month, eight fewer than in January, and about half the amount it delivered to customers in November and December.
Boeing stock continues to fall sharply after breaking below its long-term upward trend line through the end of September 2022. Additionally, last week the 50-day moving average fell below the 200-day moving average, forming an ominous death cross. This chart pattern often indicates the beginning of a new downtrend. It’s also worth noting that trading volume has increased in recent days as the stock price has fallen, indicating active participation in the sell-off.
Looking ahead, investors should keep an eye on the important 18-month horizontal near $174, which could serve as a near-term floor.
Boeing stock fell 4.3% to close Tuesday’s regular trading at $184.24. The company’s shares fell another 0.2% in after-hours trading, losing more than a quarter of its value since the beginning of the year.
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As of the date this article was written, the author did not own any of the securities mentioned above.
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