Boeing (NYSE:BA) shares sank to their lowest level in nearly eight weeks following the disclosure of instant messages from 2016 that suggested some employees may have misled the Federal Aviation Administration about the flight control system implicated in the two 737 MAX crashes.
The FAA demanded an explanation of the content and apparent delay in disclosure, and Boeing shares closed -6.8% in today’s trade just days before the company reports Q3 results on Oct. 23.
Continuing uncertainty over MAX certification could force suppliers still producing components for the jet at a rate of 52 per month, notably Spirit AeroSystems (NYSE:SPR) and Allegheny Technologies (NYSE:ATI), to cut output, Cowen analysts say.
But Boeing shares are worth buying on today’s pullback, Jefferies analyst Sheila Kahyaoglu tells CNBC.
She is not sure how much relevance the employee message disclosure will have to the long-term landscape for Boeing and the 737 MAX, but she believes the company has taken strong steps to improve safety in the future.
“The Max being certified by end of the year is becoming more and more of a stretch and entering into service more likely in Q1,” Kahyaoglu adds.