“Bottlenecks in the Approval Process”: Boeing Stock (NYSE:BA)

Aerospace stock Boeing BA +1.98% ▲ is on the cusp of something either great or terrible, depending on how things go for the next few years. Several aircraft are coming into their own, and may be about to join Boeing’s product line. But concerns are rising that certification may take longer than expected, a point that has some very concerned. Investors are offering the benefit of the doubt, though, as Boeing shares gained over 2% in Monday afternoon’s trading.

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Boeing is currently waiting on approval for the 737 MAX 7 and the 737 MAX 10, but the big point most are watching right now is the 777X. This aircraft has been delayed for years, and there are already back orders waiting to be filled. The problem is apparently connected to the approval process just as much as it is to any technical issue, as tighter rules and a backlog of work are contributing to the slow path to certification for Boeing’s newest wide-body.

Technical issues, pauses in testing, and even a new law—the Aircraft Certification Reform and Accountability Act—meant big changes, and big changes often meant big problems for getting new planes off the ground. The law required new levels of analysis that were not there before, and for manufacturers to undergo stricter oversight. While no one wants to fly in an unsafe aircraft, there is such a thing as pursuing safety too stringently, and thus bogging down the process.

Orders Pulled

Meanwhile, Boeing lost an order as Air Niugini pulled its purchase plans. The losses are not especially pronounced—the national airline of Papua New Guinea was only planning to buy two 787-8 models back in 2023—but they are there nonetheless.

Worse, Air Niugini is set to retire its wide-body aircraft in the fairly near future, leaving outside observers wondering just what will become of the airline’s operations. Air Niugini was also seen modernizing its narrow-body fleet, putting 11 new Airbus EADSY +1.92% ▲ planes into service to replace a set of Fokker 70s and Fokker 100s.

Is Boeing a Good Stock to Buy Right Now?

Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 13 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 29.68% rally in its share price over the past year, the average BA price target of $276.36 per share implies 29.02% upside potential.

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