stocks go against the market trend on Wednesday and rise when other stocks fall, the 737 MAX seems to be the reason why.
Shares of Boeing rose 1% as of 10:47 a.m. Wednesday to $231.40 a share, up from a daily low of $225.30. Shares closed at $229.09 on Tuesday. The
Dow Jones Industrial Average
have fallen by 0.4% and 0.5% respectively.
Shares flipped in Wednesday’s trading after reports pointing to: 737 MAX recertification flights planned in China. Boeing was not immediately available for comment on the messages.
The MAX was grounded worldwide for approximately 21 months from March 2019 to December 2020 after two deadly crashes that killed hundreds within five months. The aircraft was recertified in the US in December. It is allowed to fly in most places where Boeing sells planes, but China has not yet recertified the jet.
The issue of Chinese recertification is important to the company and comes up during earnings conference calls. “We continue to work with global regulators and still expect the remaining regulatory approvals to happen this year, including China,” said CEO David Calhoun on July 28. Still, the main markets for the MAX jet are the US and Europe.
China has about 100 MAX jets on the ground. Boeing has delivered about 520 MAX jets around the world to date. And of the approximately 4,000 unfulfilled MAX orders Boeing has on its books, 104 are destined for China.
Boeing shares are up about 7% so far. Covid, the MAX and 787 quality issues are still overhangs for the stock. But if those problems start to resolve on their own, Boeing shares could soar.
Analysts’ average price target for Boeing stock is about $273.18% higher than recent levels.
Write to Al Root at firstname.lastname@example.org