Boeing price target lowered to $270 from $274 at Bernstein

Bernstein analyst Douglas Harned lowered the firm’s price target on Boeing (BA) to $270 from $274 and keeps an Outperform rating on the shares ahead of quarterly results. Bernstein notes Boeing had faced new delivery delays due to the mis-drilling of holes in the aft fuselage bulkhead by Spirit’s (SPR) automated drilling machines, and it now turns out that some manually drilled holes are also mis-drilled, leading to one more round of repair for Boeing. The firm had already brought down its 2023 737 delivery outlook toward the lower end guidance, and now lowers its estimate to 396 deliveries, with the majority of the difference moving to 2024. Additionally, Bernstein points out that Boeing and Spirit agreed to an MOA, in which Boeing provides more cash to Spirit in 2023-25, a portion of which is to be recovered long-term. This means an added outflow of $60M in 2023 and a combined $395B in 2024-2025 for the 787, plus $100M in tooling and a slower repayment by Spirit of $180mn in cash advances. This is a net positive, the firm says.