Boeing shares continue to fall as more countries ground 737 Max 8 planes
The stock fell more than six per cent to $375.41 US on Tuesday
Boeing's stock took another beating on Tuesday as a raft of countries grounded its 737 Max 8 aircraft, responding to a deadly crash in Ethiopia which has so far knocked $25 billion off the market value of the world's largest planemaker.
Britain and the European Union joined China, Malaysia, Singapore, Australia and other countries in banning the 737 Max planes, piling pressure on one of the Dow Jones Industrial Average's best performing stocks this year.
Air Canada cancelled multiple scheduled flights to London after the U.K. closed its airspace to Boeing 737 Max 8s on Tuesday.
Boeing shares fell 6.1 per cent to $375.41 US on Tuesday, adding to a five per cent decline on Monday.
Southwest Airlines and American Airlines Group, which analysts said were among the U.S. airlines most exposed to the Boeing aircraft model at issue, saw their shares fall more than two per cent.
Boeing shares have delivered a total return — including reinvested dividends — of nearly four times the performance of the full index since U.S. stocks began rebounding from the 2007-09 financial crisis.
At least seven of the 24 analysts covering the stock have reviewed their ratings over the last two days, with two downgrades and one price target cut so far, according to Refinitiv data.
DZ Bank became the first brokerage in nearly two years to place a "sell" rating on the stock, while setting a price target of $333 US - the lowest on Wall Street.
Brokerage Edward Jones also downgraded the stock to "hold" from "buy," saying the accidents could result in additional expenses, some order delays and pressure financial results.
The single-aisle 737, the world's most-sold commercial aircraft, is central to Boeing's future. The Max line is the fastest-selling jetliner in the company's history with more than 5,000 orders booked and a backlog valued at nearly $500 billion US at list prices.
The United States will mandate that Boeing implement design changes by April, but said the plane was airworthy and did not need to be grounded.
Boeing defended its aircraft and said it has "full confidence in the safety of the Max."
Safety experts said it was too early to speculate on what caused Sunday's crash and black box recorders were yet to yield the cause.