Wall Street forecast: Bad news for Boeing will follow

Boeing fell to operating rock bottom last year when the 737 MAX was grounded worldwide, with the ceo’s departure, aircraft orders hitting a 10-year low and supply chains dragged down, costing almost $10 billion so far, Taiwan media said. But Wall Street expects bad news for Boeing to follow, with Bank of America even estimating that Boeing will eventually pay as much as $20 billion ($1.86) for the crash.

Wall Street forecast: Bad news for Boeing will follow

According to Taiwan’s Business Times on January 21st, Boeing’s recent internal documents have caused a number of uproars, including staff mocking the Federal Aviation Administration (FAA) for weak regulation and the expectation that the 737 MAX will be more difficult to obtain FAA approval to resume flights.

At this sensitive time, Boeing will meet on the 29th, the new executive David Calhoun took office after the maiden show. It is thought that when he takes office, he must clean up Boeing’s internal culture, boost staff morale and mend relations with authorities such as the FAA and airline customers.

The report said that while Boeing had paid $5.6 billion in pre-tax costs to affected airlines and customers for the suspension last July, several Wall Street analysts now expect Boeing’s fourth-quarter results to include additional compensation costs.

With the suspension, Bofpers Merrill Lynch analyst Epstein believes Boeing’s compensation will only get higher.

He believes that if the 737 MAX can resume in June or July, the total compensation for the final suspension, after deducting the families of the victims, could be $20 billion, equivalent to about 40 percent of Boeing’s PROFITs from last year’s MAX series, and the highest total compensation wall estimated by Wall Street.

Moody’s only downgraded Boeing’s credit rating from A2 to A3 in December, the report said, less than a month after announcing it was on a list of potential downgrades.