Boeing on track for single-digit October 737 deliveries: BofA

Investing.com -- Boeing's production of 737 aircraft is facing setbacks, with deliveries expected to be limited to single digits in October, according to a note from Bank of America.

The delays stem largely from an ongoing strike that has slowed both production and deliveries.

Citing data from Aero Analysis Partners (AAP), the bank said only one 737 has been delivered as of mid-October, with no recent customer acceptance flights for Chinese airlines and reactivations currently on hold.

"According to Aero Analysis Partners/AIR (AAP/AIR), 737 production remains at a standstill, with deliveries declining sharply, as only one 737 has been delivered as of mid-October," wrote BofA.

The bank's analysts added: "Only one aircraft has performed a customer acceptance flight since the beginning of the month."

The inventory of undelivered 737s is also said to have dropped, with the total decreasing to 146 aircraft from 158 last month. The analysts highlighted that Boeing (NYSE:BA )'s delivery target for October hinges on how long the strike continues, cautioning that further disruptions could limit activity.

Beyond the 737 program, Boeing's 787 production is also encountering delays, though to a lesser extent. "No rollouts were performed as of mid-October, while one aircraft was delivered," BofA said.

The bank notes that the company expects just one more 787 delivery for the month.

Boeing's Charleston facility, where 787 assembly takes place, is said to remain mostly unaffected by the strike. However, BofA says production still faces constraints, as key components like vertical tails are manufactured at the company's Frederickson and Salt Lake City sites, both impacted by the strike.

Despite the challenges, BofA maintained a Neutral rating on Boeing with a price target of $170.

"Production will depend on inventory available at the Charleston facility (mostly unaffected by the strike), as vertical tails manufacturing occurs at the Frederickson and Salt Lake City facilities," the analysts concluded.

Source: Investing.com