March 11, 2019 / 3:31 PM / in a year

BUZZ-Street View: Boeing shares plunge after second crash

** Shares of Boeing Co drop 7.1 pct to $392.59 in Mon trading

** China, Indonesia and Ethiopia ordered airlines to ground their Boeing 737 MAX 8 planes following the second deadly crash involving the jet in just five months


** Cowen & Co (“outperform”, $475 PT) in note call crash a “near term overhang,” but “the crash’s potential root cause likely is fixable, and we don’t see this as a long term risk for BA or key 737 MAX suppliers”

** But Cowen analysts do say “the grounding of the 737 MAX by China, Indonesia, and Ethiopian are near term reputational negatives for Boeing that could impact sales, particularly if the FAA follows suit and also grounds the plane”

** Morgan Stanley (“overweight”, $500 PT) says the accident “could disrupt opportunities for guide raises and order activity in the very near term” since the 737 covers over 70 pct of commercial production

** “We believe a worst-case scenario is a grounding of the fleet and a need for corrective actions that disrupts near-term profitability,” Morgan Stanley analyst Rajeev Lalwani says in note, adding the firm remains positive on BA shares

** JP Morgan (“overweight”, $450 PT) writes in note “It may take weeks for an initial report on the causes of the Ethiopian crash, so we are reluctant to draw conclusions about the possible impact.”

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