Boeing Company (NYSE: BA) stock value over 10 percent Monday morning as Ethiopia, Indonesia and China ordered airlines to ground the Boeing 737 MAX 8 planes after the second crash involving the jet in five months.
A Boeing 737 MAX 8 heading to Nairobi, operated by Ethiopian Airlines crashed a few minutes after takeoff from Addis Ababa yesterday, all 157 on board are deceased. The same plane flown by Lion Air had crashed off the coast of Indonesia back in October that had killed all 189 on board.
“The grounding of the 737 MAX by China, Indonesia, and Ethiopian are near-term reputational negatives for Boeing that could impact sales, particularly if the FAA follows suit and also grounds the plane,” Cai von Rumohr, analyst at Cowen & Co, said in a research note, referring to the U.S. Federal Aviation Administration.
Boeing has initiated an investigation on the Ethiopian Airlines crash. Share value of the company had fallen as low as USD 365.55 this morning but quickly rebounded as investors took action at the steep price cut.
Although recent press regarding the 737 MAX 8 planes have been deterring share value, 19 out of 24 wall street analysts have covered it as a “buy” where the remaining five have a hold rating. The last time a brokerage had a sell rating on the stock was July 2017. Although the stock dropped, Boeing Company remains the Dow’s best performer this year.