Boeing Co (BA) said on Thursday that it had moved away from a key automation system, which it had used to manufacture fuselage sections for its 777 jets, after reports of reliability issues emerged.
Instead, the plane maker will partially switch back to mechanics.
Boeing shares closed higher for the sixth time in the past ten trading sessions in New York on Thursday. The stock went up 1.36% ($4.94) to $367.44, after touching an intraday high at $368.45, or a price level not seen since November 11th ($369.75).
Shares of Boeing Company have risen 13.93% so far in 2019 compared with a 23.53% gain for the benchmark index, S&P 500 (SPX).
In 2018, Boeing’s stock went up 9.36%, thus, it outperformed the S&P 500, which registered a 6.24% loss.
Four years ago, the plane maker began manufacturing 777 fuselages in an upright orientation, as it used robots to drill holes and install fasteners. The entire process was known as fuselage automated upright build.
Now, Boeing intends to switch to “flex tracks”, an automated method of drilling the holes along the circumference of the jet, which are after that fastened manually.
According to Paul Bergman, a spokesperson for the company, the implementation of flex tracks for the 777 fuselage was initiated in Q2, while the transition is expected to be finalized by the end of this year.
Analyst stock price forecast and recommendation
According to CNN Money, the 21 analysts, offering 12-month forecasts regarding Boeing Company’s stock price, have a median target of $400.00, with a high estimate of $521.00 and a low estimate of $324.00. The median estimate represents an 8.86% upside compared to the closing price of $367.44 on November 14th.
The same media also reported that at least 11 out of 23 surveyed investment analysts had rated Boeing Company’s stock as “Hold”, while other 11 – as “Buy”.
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