Boeing (BA) stock tumbled on Monday, falling more than 7% in pre-market trading after the Federal Aviation Administration ordered the temporary grounding of some Boeing 737 MAX 9 jets.
The planes under question are fitted with a panel that flew off an Alaskan Airlines plane in midair on Friday. The order from the FAA will impact 171 planes, per the New York Times.
Friday’s incident isn’t the first safety concern for Boeing. Two fatal crashes in 2018 and 2019 led to a 20-month grounding of planes as safety changes were made.
Last week’s event caught significant attention online and has Boeing’s stock set up for its worst single-day fall in more than three years, per Bespoke Investment Group.
Still, some Wall Street analysts believe the event won’t have a longterm negative impact on the stock.
“This accident does not alter our positive view on BA,” RBC Capital Markets analyst Ken Herbert wrote in a note to clients. “We think investing in BA requires thick skin, and headline risk is substantial, but initial indications are that this is an isolated incident, and the financial risk to the MAX is not thesis changing.”
Boeing stock had been up more than 20% over the last year.
“Our view remains that Boeing’s key task over the next two years is to ramp production and deliveries of 737s and 787s,” JPMorgan analyst Seth Seifman wrote in a note to clients. “Friday’s 737 MAX 9 accident is obviously not helpful in this regard but the extent of the setback is not yet clear, with a range of potential outcomes.”
Seifman notes that a key issue moving forward will be how regulators address the incident and the timeline on when all planes can return to service.
Josh Schafer is a reporter for Yahoo Finance.
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