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Agencies
Davos
President Donald Trump on Wednesday criticised Boeing as a “very disappointing company” because of the aerospace giant’s recent problems after the grounding of the 737 MAX plane, which he said had a knock-on effect for the US economy.
“This is one of the great companies of the world, let’s say as of a year ago, and then all of a sudden things happen,” Trump said in an interview on CNBC from the Davos economic forum in Switzerland.
This “had a tremendous impact. You know, when you talk about growth, it’s so big that some people say it’s more than a half a point of GDP. So Boeing -- big, big disappointment to me,” he said.
Boeing had Tuesday officially pushed back the time frame for the 737 MAX to return to the skies, sending shares plunging and overshadowing an earlier announcement of a first flight of the delayed 777X plane.
The 737 MAX was grounded worldwide March 13, 2019 after two crashes claimed the lives of 346 people.
US Treasury Secretary Steven Mnuchin said on Tuesday he believed that issues including the grounding of of Boeing 737 MAX plane had shaved some 0.5 to 0.7 of a percent point off the US growth rate.
Analysts estimated on Wednesday that Boeing Co’s bill for the 737 MAX grounding could balloon to more than $25 billion, a day after the U.S. planemaker warned of further delay in returning its once best-selling jet to service.
The company has already booked $9 billion in costs related to the grounding, including $5.6 billion as compensation for airline customers and $3.6 billion in charges to cover additional production costs.
Jefferies analyst Sheila Kahyaoglu said Boeing may now need to boost its compensation package for customers by another $10 billion and revise its cost estimate related to the 737 MAX’s production by an additional $5.4 billion.
“Our estimates assume 737 MAX deliveries restart in Q3 2020,” Kahyaoglu said, lowering the brokerage’s price target on the stock to $390 from $420.
Boeing said on Tuesday it did not expect to win approval for the return of the 737 MAX to service until mid-year due to further potential developments in the certification process and regulatory scrutiny on its flight control system.
Added to the delay, weak Chinese demand for its widebody 787 Dreamliners as well as production problems with its new 777X jetliner have also made investors jittery, Vertical Research analyst Robert Stallard said, downgrading the stock to “hold” from “buy” and lowering his target price to $294 from $388.
Davos
President Donald Trump on Wednesday criticised Boeing as a “very disappointing company” because of the aerospace giant’s recent problems after the grounding of the 737 MAX plane, which he said had a knock-on effect for the US economy.
“This is one of the great companies of the world, let’s say as of a year ago, and then all of a sudden things happen,” Trump said in an interview on CNBC from the Davos economic forum in Switzerland.
This “had a tremendous impact. You know, when you talk about growth, it’s so big that some people say it’s more than a half a point of GDP. So Boeing -- big, big disappointment to me,” he said.
Boeing had Tuesday officially pushed back the time frame for the 737 MAX to return to the skies, sending shares plunging and overshadowing an earlier announcement of a first flight of the delayed 777X plane.
The 737 MAX was grounded worldwide March 13, 2019 after two crashes claimed the lives of 346 people.
US Treasury Secretary Steven Mnuchin said on Tuesday he believed that issues including the grounding of of Boeing 737 MAX plane had shaved some 0.5 to 0.7 of a percent point off the US growth rate.
Analysts estimated on Wednesday that Boeing Co’s bill for the 737 MAX grounding could balloon to more than $25 billion, a day after the U.S. planemaker warned of further delay in returning its once best-selling jet to service.
The company has already booked $9 billion in costs related to the grounding, including $5.6 billion as compensation for airline customers and $3.6 billion in charges to cover additional production costs.
Jefferies analyst Sheila Kahyaoglu said Boeing may now need to boost its compensation package for customers by another $10 billion and revise its cost estimate related to the 737 MAX’s production by an additional $5.4 billion.
“Our estimates assume 737 MAX deliveries restart in Q3 2020,” Kahyaoglu said, lowering the brokerage’s price target on the stock to $390 from $420.
Boeing said on Tuesday it did not expect to win approval for the return of the 737 MAX to service until mid-year due to further potential developments in the certification process and regulatory scrutiny on its flight control system.
Added to the delay, weak Chinese demand for its widebody 787 Dreamliners as well as production problems with its new 777X jetliner have also made investors jittery, Vertical Research analyst Robert Stallard said, downgrading the stock to “hold” from “buy” and lowering his target price to $294 from $388.
