The Ratings Game: Boeing stock downgraded on ‘worse-than-expected’ supply-chain problems

Boeing Co. faces ongoing supply-chain challenges that will limit upside from jet deliveries and create an overhang on investor sentiment.

That’s from analyst Ken Herbert at RBC, who on Friday downgraded his rating on Boeing

stock to the equivalent of neutral on “worse-than-expected supply chain constraints [and] lower near-term outlook.”

The analyst kept a price target of $225, an upside of around 8% over Friday prices.

Expect “inconsistent production levels” to prevent investors from giving the stock full credit for the anticipated advantage in free cash flow in 2025, Herbert said.

Don’t miss: Boeing says goodbye to ‘Queen of the Skies’ with final 747 delivery

“We also see risk with the 787 production ramp, the outlook in China, persistent questions about the company’s product strategy, margin expansion in the defense business, and the pace of the travel recovery,” the analyst said.

Boeing reported quarterly results last week, showing a surprise loss due partly to high expenses. Boeing’s fourth-quarter free cash flow of $3.1 billion rose sharply from $494 million in the year-ago period.

Shares of Boeing are up 1.6% in the past 12 months, compared with losses of around 7% for the S&P 500

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