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Northcoast cuts Boeing to neutral amid earnings concerns

EditorAhmed Abdulazez Abdulkadir
Published 2024-02-23, 08:58 a/m
Updated 2024-02-23, 08:58 a/m
© Reuters.

On Friday, Northcoast Research adjusted its stance on Boeing Company (NYSE:BA), moving its rating from Buy to Neutral. The firm cited several reasons for the downgrade, including concerns over earnings visibility and the absence of clear market catalysts. Additionally, Northcoast Research pointed out new issues with some long-term growth drivers for Boeing.

The downgrade comes as Northcoast Research expresses apprehension regarding Boeing's near-term financial performance. The firm's proprietary checks and recent news have contributed to a minimal level of confidence in the aircraft manufacturer's revised estimates. They also raised questions about how much of the potential negative news may have already been factored into Boeing's current stock price.

According to Northcoast Research, investors might anticipate a six to nine-month delay in Boeing's earnings recovery. This expected delay could result in Boeing's shares being stuck in what the firm describes as a "low-altitude holding pattern" for an extended period.

The challenges facing Boeing, as outlined by Northcoast Research, include instability in commercial aircraft production, the potential for further loss of market share, delays in the introduction and certification of new products, and reduced credibility of Boeing's management. Given these issues, Northcoast Research suggests that alternative aerospace investments, particularly those tied to aftermarket demand or wide-body aircraft production, may be more attractive to investors at this time.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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