Boeing Shares Rise on Hopes for 737 Max

Boeing 737 MAX airplanes parked on Boeing property in Seattle.


Photo:

David Ryder/Getty Images

Shares of

Boeing
Co.

ascended Thursday on a signal that the aerospace giant’s troubled fleet of 737 MAX aircraft is moving toward a return to service.

Boeing’s stock rose more than 4% after Cowen analyst

Cai von Rumohr

said the Federal Aviation Administration certification flight for the 737 MAX could take place in four to six weeks. That would be a “key milestone” in the company’s efforts to return the line of jets to service, he said, after crashes of MAX jets operated by Ethiopian Airlines and Indonesia’s Lion Air killed all 346 people on board the two flights.

Thursday’s gain pushed shares of Boeing up more than 5% this week, on pace for the stock’s biggest weekly gain since June. Shares remain down 12% since regulators grounded the jets in March, and the company’s year-to-date gain of 8.7% lags behind the broader S&P 500 and most other industrial stocks.

Despite Thursday’s upswing in Boeing shares, the company’s jet problems are likely to linger and keep the stock under pressure.

For starters, Boeing hasn’t given any additional updates on when its jets will return to service beyond saying it was aiming for the fourth quarter. And Boeing hinted last month that it could shut down production of its 737 MAX line entirely if the grounding drags into next year. Some airlines and regulators have said Boeing will likely need more time to clear pending fixes to it software.

The grounding has been wreaking havoc on Boeing’s finances. The company reported its biggest quarterly loss to date last month after taking a $7 billion hit from the grounding and slowed production of the troubled jets. Analysts expect earnings to fall again in the current quarter, followed by modest growth in the fourth quarter but only if issues stemming from the 737 move toward a resolution.

Mr. von Rumohr said Boeing is likely being silent on the FAA certification to avoid getting ahead of anything regulators might say, heading off the risk of being contradicted—something that would likely punish the stock further. He said he continues to favor the stock, saying positive developments around the FAA certification should start pushing shares higher.

Two crashes and the global grounding of Boeing’s 737 MAX commercial airliner led to extensive disruption in the international aerospace industry. WSJ’s Robert Wall explains the continuing effects of the plane’s grounding. Photo: Getty Images

Write to Michael Wursthorn at Michael.Wursthorn@wsj.com

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