JP Morgan finally backed off their “overweight” call on Boeing’s stock today.
The company explained in a note to clients that sticking with the aerospace company was no longer possible after the effects of the coronavirus and the grounding of Boeing’s 737 Max planes this year.
JP Morgan analyst Seth Seifman cut his rating to “neutral”, after being at “overweight” since July 2017, slashing his stock price target to $210 from $370.
“Our desire to hang in with Boeing until the return of the 737 MAX has worked out poorly, both regarding the timeline for re-certification and now more importantly with the impact of COVID-19 on aircraft demand,” Seifman said. “Given the stress on both operators and Boeing’s balance sheet as well as the negative data points likely to come, we prefer to re-evaluate when we have a better sense of how Boeing will get through this…and we do expect them to get through.”
His price target, while now Wall St’s lowest and $140 below the median of all major analysts, was still $21 above Wednesday’s closing prices.
Late Wednesday, Boeing said the company was freezing new hiring, overtime and was considering furloughs to preserve cash. Additionally, this week a Boeing employee in Washington state was announced by the company to have contracted the coronavirus.
Boeing’s shares were down 14.8% in pre-market trading. The company’s stock has fallen 16.7% this week alone.
Source: Equities News