Boeing officials “inappropriately coached” test pilots during recertification efforts following two fatal crashes of the 737 MAX aircraft, which killed 346 people, Reuters reported citing a congressional report released on Friday.
The report stated that Boeing (BA) and the Federal Aviation Administration (FAA) “had established a pre-determined outcome to reaffirm a long-held human factor assumption related to pilot reaction time … It appears, in this instance, FAA and Boeing were attempting to cover up important information that may have contributed to the 737 MAX tragedies.”
Boeing responded that it takes “seriously the committee’s findings and will continue to review the report in full,” while the FAA announced that it is studying the report which contains a number unsubstantiated allegations, according to Reuters.
Several whistleblowers have come forward claiming that both Boeing officials and FAA senior management worked together to manipulate recertification tests, the report claimed.
Both the Senate committee and the House of Representatives unanimously passed bills last month to reform FAA certification procedures as well as granting new protection to whistleblowers, Reuters said. (See BA stock analysis on TipRanks)
Last week, Morgan Stanley analyst Kristine Liwag reiterated a Sell rating on the stock with a price target of $165 (25% downside potential). Liwag believes the company will need to raise equity to reduce its $61 billion debt load.
Overall, consensus among analysts is a Moderate Buy based on 9 Buys, 8 Holds and 3 Sells. The average price target stands at $220.65 over the next 12 months, suggesting that shares are fully priced at current levels. The stock has lost 32% of its value this year.
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