Boeing Production Rates to Remain a Watch Item Depending on Length of Union Workers' Strike, Truist Says
Boeing's (BA) production rates will remain a watch item depending on the duration of the strike of union workers, who have rejected the company's proposed new contract, Truist Securities said in a note Friday.
"With the [Federal Aviation Administration] currently dictating the pace at which Boeing can produce 737 MAX planes we believe the duration of the strike and associated return to the job disruptions could push rate increases to the right," Truist said.
The firm said the overall supply chain would unlikely be impacted if the strike lasts for two to three weeks.
"However, given the proximity to Q3 end we do believe disruptions in Boeing's ability to accept inventory and or complete aircraft in its finishing stalls could lead to temporary working capital pressures in the supply chain," the firm said.
Boeing shares were down 2.9% in premarket activity on Friday.
Price: 158.29, Change: -4.48, Percent Change: -2.75
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