Most of us likely did not know that aerospace stock Boeing (BA) even had something called a “shadow factory.” But, as reports noted, they did, and now they are shutting it down. That will prove to be welcome news, but investors were less than pleased. Boeing shares were down fractionally in Friday afternoon’s trading.
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A “shadow factory,” reports note, is what Boeing calls a production line that is devoted to fixing current aircraft, or providing maintenance for same, instead of actually building new aircraft and filling that massive backlog of previous orders. Right now, shadow factories are at work for two of Boeing’s biggest lines: the 737 MAX and the 787 Dreamliner.
Getting the shadow factories put down can free up workers, a move which Boeing sorely needs right now as it looks to get its production back up to snuff and get in enough workers to keep the lines moving. Without the shadow factories, Boeing stands to get back a lot of raw worker hours. Earlier estimates suggest that as much as 30% of a Boeing employee’s job is fixing something that went wrong.
The Government Getting Involved Again
In an unexpected burst of urgency, new Transportation Secretary Sean Duffy wants another meeting with Boeing on matters of “quality and safety issues.” Duffy is eager to evaluate Boeing’s measures to improve safety and make for a better adherence to the best in safety standards. This could, however, be good news; the production cap remains in place, and will remain in place until Duffy himself is satisfied. The first step to satisfying Duffy, therefore, would be to have Duffy out to see just what is going on at Boeing now.
Finally, Boeing has a new client for its Chinook helicopter line: Japan. Japan ordered 17 CH-47 Chinooks, reports note, and represents the fourth country to purchase the aircraft. Financial details were not disclosed, but Germany purchased 60 of them for $4 billion back in 2022, which offers some idea of what Japan will pay.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 13 Buys, five Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 10.46% loss in its share price over the past year, the average BA price target of $196.88 per share implies 7.03% upside potential.
