Boeing's earnings, outlook overshadowed by 787 unknowns
Goldman Sachs removed Boeing from its "conviction buy" list, BB&T Capital Markets reduced the stock to "hold" and then "underweight", and Moody's said the 787 grounding was "credit negative" for the company while keeping its ratings intact. Twenty analysts rate the stock a buy or strong buy, according to Thomson Reuters data.
Also on the upside, Boeing is targeting more defense sales to Asia, as other defense companies are doing, to stabilize the 40 percent of revenue coming from that side of the company and stave off the effects of US budget sequestration.
"We expect flat-to-declining revenues" for Boeing's defense and space business in the medium term, Khan at Society Generale wrote in a note to clients.
Some analysts say the 787 problems appear to be relatively easy to fix, perhaps by swapping in a different battery type.
But even so, Boeing still faces a longer-term review of its design, manufacturing and assembly processes by the Federal Aviation Administration.
The FAA has not set a time frame for its wide-ranging investigation, which is aimed at dealing with an assortment of problems with the new jet. An electrical fault caused an emergency landing by a United Airlines plane on Dec. 4, the same day that the FAA ordered inspections of fuel lines because of leaks..
A few weeks later, a 787 in Boston spilled about 40 gallons of fuel on the tarmac as it taxied for take-off. Then a
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