Boeing Sept. Deliveries Drop, No New Orders; Shares Down 3%

Boeing delivered 11 aircraft in September down from 13 a month ago and taking the total in the third quarter to 28 jets, while cancellations and deferrals continue to take a toll. Shares closed 3.1% lower on Tuesday.

Boeing’s (BA) monthly data showed adjusted aircraft orders were negative in September with 51 net cancellations, bringing the number in the three months to September to 199 and to 983 on a year-to-date basis. During the month of September, the US planemaker did not record a single new order, while three orders for its grounded 737 MAX jetliner were cancelled. The 737 MAX has been grounded for more than a year after two fatal crashes.

September delivery included one 747 to United Parcel Service, one 767 to FedEx and one 777 to Lufthansa Cargo, as well as seven 787 Dreamliner jets delivered to global airlines.

In the first nine months of 2020, total deliveries stood at 98 aircraft, down from 301 aircraft compared with the same period a year ago.

“We continue to work closely with our customers around the globe, understanding their near-term and longer term fleet needs, aligning supply and demand while navigating the significant impact this global pandemic continues to have on our industry,” said Boeing’s CFO Greg Smith. “We’re taking actions to resize, reshape and transform our business to preserve liquidity, adapt to the new market reality and ensure that we deliver the highest standards of safety and quality as we position our company to be more resilient for the long term. Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability as we adapt and rebuild stronger for the other side of the pandemic.”

Shares in BA have plunged more than 50% year-to-date as the coronavirus travel restrictions have resulted in a deep cut in the number of commercial jets and services Boeing customers need over the next few years. As such, global airlines suffering billions of dollars in losses have been seeking to cancel or delay some of the orders they have with Boeing including the 737 MAX. (See BA stock analysis on TipRanks)

In reaction to the delivery numbers, Cowen & Co analyst Cai Rumohr reiterated a Hold rating on the stock with a $150 price target.

“Sept’s 11 aircraft deliveries brought Q3 to 28 vs. our est. 30; and customer deferrals and cancellations remain an issue,” Rumohr wrote in a note to investors. “The weak September deliveries also suggest that Q3 consensus may be aggressive and 787 production plans could have downside risk.”

Rumohr added that “because 787 deliveries in the Q lagged BA’s indicated 10/month production rate, BA may decide to revise downward its current plan to go to 6/month in mid-2021.”

The rest of the Street has a cautiously optimistic outlook on the stock with a Moderate Buy analyst consensus on the stock. That’s with a $188.93 average analyst price target (17% upside potential).