- Boeing (BA -0.9%) will need to cut the 777 production rate again, and possibly more than once, Goldman Sachs says, as it maintains a Sell rating on BA shares with a $101 price target.
- Boeing already moved to a rate of seven per month in 2017 but Goldman thinks the rate will slip to five per month in 2018 and four in 2019; the firm is concerned that the bull case on Boeing viewed the rate cut to seven as de-risking the 777X transition, and the stock price does not discount more 777 reductions and their large impact to EBIT and cash.
- Goldman believes BA's supply/demand equation remains very challenged for the next several years and is one of the reasons earnings and cash flows will fall sort of consensus and expectations.
- Now read Boeing 777: Filling the gap