Text size
A Boeing 737 MAX 10 airliner taxis at Boeing Field after its first flight on June 18, 2021 in Seattle, Washington.
Ellen Banner-Pool/Getty Images
Boeing
stock jumped on reports that the 737 MAX would be tested for recertification in China, though the stock has been giving back its gains.
Boeing shares were up 1% as of 10:47 a.m. Wednesday, to $231.40 a share, rising from a daily low of $225.30.
By midday, shares were off 0.9%, while the
S&P 500
and
Dow Jones Industrial Average
were down 0.4% and 0.9%, respectively.
Shares initially turned around in Wednesday trading after reports indicating 737 MAX recertification flights have been scheduled in China.
Boeing didn’t have a comment about China specifically, but said in an emailed statement: “Boeing continues to work with global regulators as they complete their validation processes in order to better understand enhancements to the airplane.”
The MAX was grounded worldwide for about 21 months from March 2019 to December 2020 following two deadly crashes that killed hundreds inside of five months. The plane was recertified in the U.S. back in December. It is allowed to fly in most places Boeing sells planes, but China hasn’t recertified the jet yet.
The issue of Chinese recertification is important for the company and comes up on earnings conference calls. “We continue to work with global regulators and still anticipate that the remaining regulatory approvals will occur this year, including China,” said CEO David Calhoun on July 28. Still, the U.S. and Europe are the most significant markets for the MAX jet.
China has about 100 MAX jets grounded. Boeing has delivered about 520 MAX jets around the world to date. And of the roughly 4,000 unfilled MAX orders Boeing has on its books, 104 are destined for China.
Boeing stock is up about 7% year to date. Covid, the MAX and 787 quality issues are still overhangs for the stock. But as those issues start to resolve themselves, Boeing shares can rise.
The average analyst price target for Boeing stock is about $273, 18% higher than recent levels.
Write to Al Root at allen.root@dowjones.com
[ad_2]
Source