Boeing slides to its lowest level in 13 months after pushing the 737 Max's ungrounding to mid-2020
- Boeing shares slumped as much as 5.5% in late Tuesday trading after the company announced its 737 Max won't return to service until at least mid-2020.
- The stock tanked to its lowest price since December 2018, wiping out more than $10 billion (R144 billion) in market value.
- The company's latest estimate for the model's return to service "is informed by our experience to date with the certification process," according to a Tuesday statement.
- For more stories go to the Business Insider South Africa homepage.
Boeing shares tanked as much as 5.5% in late Tuesday trading after the jet manufacturer announced its 737 Max model won't return to service until at least mid-2020.
The company's latest estimate "is informed by our experience to date with the certification process," Boeing said in a Tuesday statement. The company will provide additional information on its push to return the 737 Max to service in its fourth-quarter earnings report scheduled for release on January 29.
"Returning the MAX safely to service is our number one priority, and we are confident that will happen," the company said.
Boeing stock traded as low as $305.83, its lowest price since December 2018. The Tuesday drop erased more than $10 billion (R144 billion) in market value.
Major US stock indexes dropped on the news. The Dow Jones Industrial Average slumped as much as 0.68%, while the S&P 500 tumbled as much as 0.37%. Boeing is the most heavily weighted stock in the Dow.
The best-selling model has been grounded since March after two fatal crashes in late 2018 and early 2019 killed 346 passengers. The crashes, both attributed to technical issues in the jet, prompted congressional hearings, the firing of CEO Dennis Muilenburg, and even a projected hit to US gross domestic product in the new year.
The firm announced in mid-December it would halt production of the 737 Max in January as it continued to seek regulatory approval for the model. Boeing shares sank 4.3% on the news. The pause also hit the share prices of firms in Boeing's supply chain.
The Federal Aviation Administration called the company's initial timeline for returning the 737 Max to service "not realistic" in emails leaked on December 12.
Boeing stock traded at $312 per share as of 3:20 p.m. ET Tuesday, down roughly 4.2% year-to-date.
The company has 10 "buy" ratings, 16 "hold" ratings, and three "sell" ratings from analysts, with a consensus price target of $361.97, according to Bloomberg data.
Receive a daily update on your cellphone with all our latest news: click here.
Also from Business Insider South Africa:
- With SAA at death's door - here's how FlySafair became the biggest domestic airline in six years
- EXCLUSIVE: New Eskom CEO says 'significant changes' are coming – which may include subsidised lightbulbs
- SA internet update: Repair ship departure pushed to Wednesday evening, says Openserve
- ANC thinks municipalities should buy their own electricity - report
- He’s ‘not entirely insane', says Eskom’s new CEO – here’s why he took the job
- De Ruyter: Soweto electricity payment rate doubled in only three months