Boeing August Delivery Numbers Suggest Downside Risk To Full-Year Targets: Analyst

Boeing Co (NYSE: BA) reported August delivery numbers Wednesday that suggest its full-year delivery target may be at risk, according to a BofA Securities analyst. 

What Happened? Boeing reported 22 deliveries, 53 gross orders and 23 net orders in the month of August. The August numbers were a significant improvement over the 13 deliveries and negative 12 net orders Boeing reported in August 2020.

Related Link: Why It Could Take Boeing Years To Get Back On Track Following Latest Starliner Delay

Why It’s Important: While the latest delivery numbers indicate Boeing’s business is trending in the right direction, analyst Ronald Epstein said Wednesday the August delivery numbers suggest Boeing may be falling behind on its targets of delivering 50 737 MAX jets per month and finishishing the year with 225 aircraft in inventory.

“Assuming an average 2H21 production rate of ~21 aircraft per month, BA would need to ramp-up deliveries to ~62 jets per month from just 14 jets in August in order to reach the 225 inventory target by year end,” the analyst said.

Epstein is projecting 35 737 deliveries per month in the second half of 2021 and a year-end inventory of 303 jets.

Year-to-date, Being has delivered 141 MAX planes and received 199 net orders. Competitor Airbus delivered 40 jets in August and has now delivered 384 jets year-to-date, well ahead of Boeing’s 2021 total of just 206 deliveries.

The good news for Boeing investors is that its 280 net orders so far in 2021 far surpass Airbus’ 132.

Bank of America has a Neutral rating and $265 price target for Boeing.

Benzinga’s Take: Until the company can demonstrate a shift in its culture and an improvement in its quality control, Epstein and many other analysts and investors are likely staying on the sidelines when it comes to Boeing.

The entire air travel industry took a huge hit during the pandemic, but Boeing clearly has its own unique set of problems.