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Boeing Stock Slips as Barclays Cuts 2021 Delivery Forecast

Boeing will see a slower-than-expected pace of deliveries for its 737 Max, Barclays says.

Boeing's  (BA) - Get Boeing Company Report is likely to see a slower-than-expected pace of deliveries for its 737 Max and a longer-than-expected delay on the restart of its 787 Dreamliner, according to a Barclays analyst.

Analyst David Strauss on Tuesday raised his price target for the Chicago aerospace giant to $220 from $210. He has an equal weight rating on the stock.

Shares of the company at last check were down 1.8% to $220.20.

"We have reduced our 2021 delivery forecast to reflect a slower-than-expected pace of Max deliveries and longer-than-expected delay on 787 restart," Strauss said in a research note. 

While lower 2021 deliveries would be expected to benefit future deliveries and free cash flow, Strauss said the pace of inventory destock for both the Max and 787 will be slower than expected, "limited by lower market share on Max and a slow-to-recover wide-body market on 787."

Earlier this month, The Wall Street Journal reported that Boeing would not deliver its new 787 Dreamliner to airlines until late October, since the Federal Aviation Administration reportedly declined to inspect the aircraft.

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The FAA said in July that some undelivered 787 Dreamliners had a structural flaw that the company needed to repair before delivering to customers. 

Strauss said his price target "continues to reflect a blend of 14 times  Ebitda and 5.5% free-cash-flow yield on our 2024 forecast, now discounted back one year (vs two prior)."

The Journal also reported that the U.S. Justice Department reportedly intends to file criminal charges against a top Boeing pilot that the agency believes misled the FAA about safety issues related to the 737 Max.

The 737 Max crashed in 2018 and 2019, killing a total of 346 people.

Separately, Ryanair Chief Executive Eddie Wilson said the airline expects a large deal with Boeing on an order for the 737 Max 10 "will come our way eventually" as cancellations pressure the plane producer, Reuters reported. The executive added that "we're not in a hurry to do something."

In addition, Delta Air Lines  (DAL) - Get Delta Air Lines, Inc. Report CEO Ed Bastian said last week that he envisions a "place" at the airline for 737 Max aircraft, as it eyes opportunistic deals to revamp its fleet over the next decade, Airline Week reported.