Boeing (BA) - Get Boeing Company Report shares eased Tuesday after the jet maker revealed that another 63 orders for its embattled 737 MAX plane got cancelled in November and that it delivered only seven planes.
By comparison, Boeing delivered 24 aircraft in November 2019, according to data on its web site.
The Federal Aviation Administration gave approval last month for the 737 MAX to resume flying. It was grounded in March 2019 after two fatal crashes. Deliveries of the 737 are expected to resume this week, with the first coming at United Airlines (UAL) - Get United Airlines Holdings, Inc. Report, according to the Seattle Times.
Boeing registered zero 787 Dreamliner deliveries last month. It said that deliveries will suffer this month too amid inspections for quality issues and the rampaging coronavirus. Sliding deliveries are a major problem for Boeing, because that’s how it generates its cash.
Boeing recently traded at $236.76, down 0.59%. It has slid 27% year to date, but has soared 64% since Nov. 2, boosted by the FAA permission for its 737 MAX.
Last week, Boeing announced that Ireland’s discount airline Ryanair agreed to buy 75 of the 737 MAX jets.
Morningstar analyst Burkett Huey is cautiously bullish on Boeing, putting fair value at $260. “While the resumption of U.S. 737 MAX deliveries is a critical step, aircraft are sold globally, and the plane remains grounded in Europe and China, the two other major aviation markets,” he wrote in a commentary last month.
“We’ve seen optimistic news out of Europe that the MAX is well on its way to returning to service and may receive authorization to resume operations by the end of the year. We are unsure of its progress in China, and we worry that it might be used as a tool in the escalating tensions between the U.S. and Chinese governments,” Huey added.