Boeing Company (NYSE: BA) shares are trading lower on Wednesday. On Tuesday, the company reported that it delivered over 33 aircraft to customers in September amid the disruption to manufacturing operations.
RBC analyst Ken Herbert says that despite the strike, the 27 MAX deliveries in September are viewed as a slight positive.
The analyst anticipates a significant drop in Boeing's October deliveries due to the ongoing IAM strike, which began on September 13th, halting production of the 737, 767, and 777 models.
Initially, investors expected 400-450 MAX aircraft deliveries for the year, but expectations have now likely fallen to around 325, adds the analyst.
Herbert says that investors' attention is shifting to the MAX production ramp in 2025, with consistent production in the high 30s per month by year-end seen as a positive.
However, the analyst believes that company orders are not a primary concern for investors right now, even as order activity tends to slow during economic easing.
With Boeing's substantial backlog, the focus will likely be on resolving the IAM contract and managing liquidity and cash burn amid the ongoing strike, adds the analyst.
The analyst rated the company as Outperform with a price target of $220.00.
Today, Boeing suspended negotiations with the machinists' union after failed talks, deepening financial strain amid a month-long strike.
Technical indicators show Boeing stock under significant selling pressure, with risks of further downside.
Investors can gain exposure to HON via Gabelli Commercial Aerospace and Defense ETF (NYSE: GCAD) and Invesco Aerospace & Defense ETF (NYSE: PPA).
Price Action: BA shares are down 2.7% at $150.48 at the last check Wednesday.