Bank of America Asserts Boeing is ‘Too Big to Fail’ Amid Recent Challenges

Despite facing significant operational challenges, including a recent incident with an Alaska Airlines-operated 737 Max 9 where a door plug blew out, Boeing remains “too big to fail,” according to Bank of America analyst Ronald Epstein. As one of the only two major players in the commercial jetliner manufacturing duopoly alongside Airbus, Boeing is well-positioned to withstand current headwinds.

In a recent update, Epstein emphasized Boeing’s unique standing in the industry, stating, “Boeing remains uniquely positioned to the robust air traffic demand environment, with the moat that the duopoly creates.” He acknowledged, however, that “turning around operations could take time and uncertainties remain in the near future.”

Among the uncertainties facing Boeing are the ongoing negotiations to re-acquire its former division, now known as Spirit Aerosystems, the search for a new CEO, and ongoing contract negotiations with its employees represented by the International Association of Machinists and Aerospace Workers union. These challenges are compounded by the company’s current financial strain, as it continues to hemorrhage cash.

Despite these difficulties, Bank of America is optimistic about Boeing’s financial prospects, upgrading its price target on the company’s stock to $200 a share from $180. This adjustment reflects a potential 10% increase from current levels, even though Boeing’s stock price has fallen more than 28% over the year.

This analysis underscores the belief that Boeing’s integral role in global aviation and its monopolistic position with Airbus provides it with a significant buffer against temporary setbacks, ensuring its long-term survival and eventual recovery in the face of ongoing challenges.