Boeing Stock Bounces Back as Analysts See Normalized Earnings Potential Unchanged
Boeing's stock experienced a significant drop on Monday after news broke of a software glitch in its 737 MAX airliners. The company identified the issue, and the Federal Aviation Administration (FAA) subsequently postponed certification of the 737 MAX 10 pending resolution.
However, on Tuesday, Boeing's stock rebounded, rising by 2.8% as investment bank UBS reiterated a 'buy' rating on the aerospace stock. Analyst Gavin Parsons believes investors are underestimating the normalized earnings potential of Boeing, which he says remains unchanged despite concerns over the glitch.
Parsons acknowledges that Boeing faces some near-term risks to cash flow and potential delays in deliveries due to issues with Southwest Airlines and United Airlines. Nevertheless, he is confident that the company will be able to patch the software issue by early 2028 and resume deliveries.
In a separate development, NASA announced plans to return Boeing's Starliner spacecraft to operations after it was plagued by issues earlier this year. The space agency has expressed interest in using Starliner as its preferred means of transporting astronauts to the International Space Station, potentially replacing SpaceX's Falcon 9 and Crew Dragon.