They note that the stock has sharply underperformed the S&P 500 index since March 4. Boeing has dropped 40% since then, compared with a 16% decline for the S&P 500.
“Given the estimated impacts from the Covid-19 outbreak on Boeing Global Services and cancellation/deferral risk, as well as our estimate that the 737 MAX return to service will slip into the fall, we view this relative underperformance as warranted,” the analysts, led by Ronald Epstein, wrote in a report.
Some in the airline industry have expressed hope that the jets will come back into service this summer.
“We think the shares are now fairly valued at the current price trading range,” the analysts wrote.
They halved their price target to $180 from $360 “on market derating, increased volatility, and lower earnings.” They affirmed their neutral rating.
“We do not see a material threat to Boeing’s financial stability given recent news or share- price move,” the analysts said.
They say Boeing has “ample liquidity with sufficient access to additional unsecured debt funding if it were so required, given Boeing’s strong scale and presence in the credit market.”
Friday marks the one-year anniversary of the grounding of the 737 Max jet after two deadly accidents in 18 months.
“As airlines experience delivery delays of this magnitude, they may have the ability to walk away from MAX orders with no penalty,” the report said.
At last check, Boeing shares traded at $167.67, up 8.3%.