Boeing Shares Drop 4.5% Amid Production Bottlenecks Despite Korean Air Order
Boeing shares dropped 4.5% after CEO Kelly Ortberg highlighted persistent wing production bottlenecks at the Renton, Washington factory. The delays are hindering efforts to stabilize 737 MAX production at 47 jets per month, overshadowing a record $36.2 billion order from Korean Air for 103 aircraft. The order includes a mix of 787-10 Dreamliners, 737-10s, 777-9s, and 777-8 Freighters, marking a significant deal to support fleet modernization.
The stock’s decline extended its year-to-date loss to about 7%, marking its largest single-day drop since May. Investors reacted negatively to Ortberg’s comments at Morgan Stanley’s Laguna Conference, where he cited wing production issues as the primary constraint. At the time of publication, Boeing shares were trading 0.23% higher at $197.45, near recent lows, and maintaining a bearish 'death cross' technical pattern.
Despite the production challenges, Boeing reported progress on other fronts. Flight testing for the 737 MAX 10 has been completed, with certification expected soon. Additionally, Boeing and American Airlines completed their first landing gear exchange for the 737 MAX, aiming to reduce aircraft-on-ground risk and improve maintenance turnaround. Analysts maintain a Buy consensus rating with an average price forecast of $273.13, although the stock remains below key moving averages.
CEO Kelly Ortberg also clarified that no large aircraft order was received from China, with purchases expected to be incremental. The 777X program faces certification delays due to GE Aerospace's engine mid-seal certification plan, though 2027 delivery targets remain unchanged. CFO Jay Malave reaffirmed the 2026 free cash flow forecast of $1 billion to $3 billion, noting a reduced likelihood of exceeding the midpoint due to slower-than-expected production ramps.