Boeing Stock Soars on Analyst Upgrade and FAA Approval
Boeing's stock surged 8% on Monday, outperforming its peers in the aerospace and defense sector. The gain was largely driven by two pieces of company news: a BNP Paribas analyst upgraded the stock from Sell to Buy, and the FAA granted an amended type certificate for the 737-7.
The 737-7 is the smallest version of the 737 MAX, which has been delayed for years. While management had hinted that the certificate was imminent, Monday's approval was not entirely unexpected. However, it does mark a significant milestone for Boeing, clearing the way for commercial service in 2027.
What matters most to Boeing is not just this approval, but the fact that testing on the 737-7 has been completed. This frees up engineering capacity for another program - the 777X, which carries a harder deadline of first delivery in 2027. Boeing's management expects to move some engineers from the 737 program to the 777X.
The supply chain and delivery paperwork remain the near-term constraint for Boeing, with engine deliveries still behind schedule and seat certifications holding back finished airplanes.