Boeing Continues to Tumble After Fifth Dreamliner Delay

Shares in Boeing Co.’s (BA) continued to tumble Wednesday after the Chicago-based plane maker announced its fifth delay to its new 787 Dreamliner program. The new aircraft was suppose to take to the sky in the coming weeks, but the manufacturer delayed the first flight Tuesday due to structural problems that could hamper its maneuverability.

Boeing’s unwillingness, however, to give a new timeframe for the first flight is “concerning,” according to David Strauss, UBS analyst. Mr. Strauss said his contacts expect the delay could push the first flight out by two months, but he also noted that its airline customers are expecting a delay of as much as six months.

He said in a note to clients:

We wouldn’t be surprised to see further issues come up and, as we have believed all along, we don’t think 787 risk really mitigates until several months into flight test. We thought the aero stocks had run too far, too fast and see this 787 news along with what we still think will be further production cuts and downside to EPS expectations helping to get them back to where we can be more constructive.

Because of this, Mr. Strauss favors “what is worst now [is] what should improve earliest” in the aerospace sector, including Goodrich Corp. (GR), Rockwell Collins (COL), Inc., and TransDigm Group Inc. (TDG).