Skip to main content

Market Overview

Boeing CEO Grilled By Shareholders On 737 Max Issues

Boeing CEO Grilled By Shareholders On 737 Max Issues

Boeing Co (NYSE: BA) stock traded mostly flat Monday after CEO Dennis Muilenburg discussed the company’s outlook with shareholders in the wake of its 737 Max issues. The 737 model was grounded earlier this year after two fatal crashes involving its most popular model.

Muilenburg denied accusations that Boeing rushed the 737 Max to market.

“It was a six-year development; 1,600 test-flights of the airplane; 3,700 flight hours of development on the Max, so it was thorough and it was disciplined,” Muilenburg told shareholders on Monday. He said investors and the media should remain patient for the outcome of the ongoing investigations into the crashes.

Muilenburg said Boeing is making steady progress in implementing a software fix for the issues that caused the two crashes and said pilots have already logged 246 hours of test flight time with the new software. Muilenburg said Boeing is working with airliners that have missed out on profits due to the 737’s grounding, but said Boeing is primarily concerned with safety at this point.

Financial Impact

Raymond James estimates Southwest Airlines (NYSE: LUV) will take a $260 million revenue hit in the first quarter thanks to the 737 Max grounding. The firm also estimates American Airlines Group Inc (NYSE: AAL) will also lose $185 million in the second quarter.

For now, at least, Muilenburg’s position as both chairman and CEO appears to be safe. Shareholders on Monday voted down a proposal to separate the CEO and chairman positions, and Muilenburg said he has no intention of stepping down.

“I am strongly vested in that my clear intent is to continue to lead on safety and quality and integrity,” he said.

Muilenburg told investors Boeing doesn’t need a tragedy like the loss of hundreds of lives to continuously look for ways to improve safety.

“We never claim we have reached the end point. We are continuously, across all of our airplane programs, improving safety every day,” he said.

Analyst Reaction

Boeing shares are down 13 percent since March 1 but are still up 17.9 percent overall year-to-date. CFRA analyst Jim Corridore said Boeing likely won’t be back to full production until 2020.

“As an analyst, we’re looking toward the future, and the future for Boeing is going to be fine as long as they get this right,” Corridore told CNBC of the investigation and software fix.

Despite the overhang, Corridore is bullish on Boeing and has a Buy rating and $450 price target for the stock.

Related Links:

Today's Pickup: Boeing 737 Groundings To Cost Company $1 Billion

Barron's Picks And Pans: Boeing, Chevron, Netflix, Tesla And More

Photo credit: Jeff Hitchcock, Wikimedia

Latest Ratings for BA

May 2021BernsteinUpgradesUnderperformMarket Perform
Apr 2021Credit SuisseMaintainsNeutral
Apr 2021Credit SuisseMaintainsNeutral

View More Analyst Ratings for BA
View the Latest Analyst Ratings


Related Articles (BA)

View Comments and Join the Discussion!

Posted-In: 737 MAX Boeing 737Analyst Color News Price Target Management Top Stories Analyst Ratings Best of Benzinga

Latest Ratings

FLEXCross ResearchUpgrades22.0
DRICowen & Co.Upgrades164.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at