Oh, Boeing (BA)…it just gets worse, doesn’t it? The beleaguered aerospace firm, fresh off a preposterous grilling session from the National Transportation Safety Board (NTSB), now finds itself once again in NASA’s crosshairs. This time, it is over the Space Launch System, and Boeing lost another 2% in Monday afternoon’s trading on the latest criticisms.
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The latest word comes from the Office of Inspector General (OIG) at NASA, which found “significant issues” with the work from the Block 1B version of the Space Launch System (SLS), currently under construction at the Michoud Assembly Facility in New Orleans. We’ve already heard about some of these issues, but further reports have come to light.
Reports noted that 71 corrective action requests (CARs) have been issued from the Defense Contract Management Agency (DCMA), which was monitoring Boeing’s work on the SLS upper launch system and the core system in general. To make matters worse, 24 of the 71 CARs were “Level 2,” which denotes issues with either critical safety hardware or things that can’t be immediately addressed.
New Air Force Deal
Meanwhile, there was some good news for Boeing. It just finalized a deal with the Air Force over the E-7 Wedgetail. The Air Force will shell out $2.6 billion for two of them, which sounds like a lot, mostly because it is. However, there’s a greater reason behind that substantial outlay.
As it turns out, Boeing will have to modify the Wedgetails to meet a set of U.S.-specific requirements for planes that American allies are already flying. The Australians, for example, have been flying Wedgetails for some time. It doesn’t hurt that the Wedgetail has met with significant success in Australia, either.
Is Boeing Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 15 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 30.7% loss in its share price over the past year, the average BA price target of $218 per share implies 33.05% upside potential.
