Trump Calls Boeing a `Big Disappointment'; Vertical Research Sees 'Disaster' in Boeing Report

President Trump says he's disappointed with Boeing after the aerospace giant said it did not expect its 737 MAX aircraft to resume flying until mid-2020.
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President Donald Trump on Wednesday expressed displeasure with Boeing (BA) - Get Report after the Seattle plane producer said it did not expect its 737 MAX aircraft to resume flying until mid-2020.

Boeing shares at last check were down 2% to $307.19.

“I am so disappointed in Boeing -- had a tremendous impact,” Trump said on CNBC. "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. Big disappointment.”

Separately, analysts from Vertical Research Partners said they expected Boeing's earnings report to be "an absolute disaster" in light of the latest 737 MAX delay

The firm downgraded the aerospace giant's stock to hold from buy. The analysts also pared their price target for Boeing to $294 from $388 and cut forecasts for 2019 to 2022.

Boeing shares slumped to the lowest level in more than a year Tuesday following the announcement.

Analysts Robert Stallard and Karl Oehlschlaeger said in a note to clients that "while yet another push out in the estimated return to service of the MAX is bad enough, the ramifications of this have yet to reverberate."

The 737 MAX was grounded last year after two fatal crashes killed hundreds of people. Last month Boeing ousted its CEO over his handling of the crisis and suspended production of the plane.

"From a Boeing perspective, this means over a year without deliveries of its most profitable product line, while customer compensation costs are likely to be higher than previously thought," the analysts said. 

"As we noted in our fourth-quarter 2019 earnings preview, we are expecting Boeing's upcoming results to be 'an absolute disaster,' and that now looks guaranteed."

Boeing is scheduled to report results on Jan. 29.

Stallard and Oehlschlaeger also complained about "hubris" and "a toxic corporate culture that has arguably been the root cause of many of the problems that Boeing management now has to deal with."

The two analysts also said the 737 MAX is inferior to Airbus's  (EADSY)  A320 NEO, the 787 rate is "arguably too high" and the 777x is facing development and demand challenges.

Last month Boeing ousted CEO Dennis Muilenburg over his handling of the crisis and suspended production of the plane. Muilenburg, 54, was succeeded by David Calhoun.

"A new CEO could help," the two analysts wrote, "but in our experience, changing a company's culture is a very tough, long-term process."