The Federal Aviation Administration (FAA) announced that Boeing Co had been informed the regulator would be the sole issuer of airworthiness certificates for all new 737 MAX jets.
Boeing shares closed lower for the fourth time in the past ten trading sessions in New York on Wednesday. It has also been the steepest daily loss since November 8th. The stock went down 1.48% ($5.51) to $368.00, after touching an intraday low at $366.90, or a price level not seen since November 22nd ($366.61).
Shares of Boeing Company have risen 14.11% so far in 2019 compared with a 25.80% 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.
In a letter sent to Boeing Co earlier this week, the regulator noted it “has determined that the public interest and safety in air commerce require that the FAA retain authority to issue airworthiness certificates and export certificates of airworthiness for all 737 MAX airplanes.”
The FAA notified Boeing that it would retain the authority to issue the certificates until it is assured the plane maker has “fully functional quality control and verification processes in place”.
The agency also reiterated that its review of design changes to the 737 MAX aircraft and related pilot training had not been completed yet.
“We continue to follow the lead of the FAA and global regulators,” Gordon Johndroe, a spokesperson for Boeing, was quoted as saying by Reuters.
“They will determine when key milestones are achieved and when the fleet and training requirements are certified so the MAX can safely return to service,” Johndroe added.
Analyst stock price forecast and recommendation
According to CNN Money, the 20 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 8.70% upside compared to the closing price of $368.00 on November 27th.
The same media also reported that at least 11 out of 22 surveyed investment analysts had rated Boeing Company’s stock as “Hold”, while 10 – as “Buy”.