Boeing Stock Drops on 777X Delays. Should Investors Worry?

Boeing has sold more than 600 777X jets so far. (Nathan Laine/Bloomberg)

Key Points

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• Boeing’s stock slipped Friday partly due to certification delays of its 777X jet, despite the plane and engine performing well in testing.
• CEO Kelly Ortberg said that deliveries of the new jet could slip into 2027, which could have a significant financial impact.
• BofA Securities analyst Ron Epstein says certification delays for the 777x shouldn’t trouble investors in the long run.

Boeing stock slipped Friday partly because of the “mountain of work” left to do certifying its huge 777X twin-aisle plane with the Federal Aviation Administration.

The 777X is Boeing’s newest wide-body jet that can carry more than 400 passengers in certain cabin configurations. When ready for commercial service, it “will be the world’s largest and most efficient twin-engine jet, unmatched in every aspect of performance,” according to the company. The 777X completed its first flight in 2020, but the certification process bogged down with Boeing facing more regulatory scrutiny after problems with its 737 MAX jets.

“So the mountain of [777X certification] work is still there,” said CEO Kelly Ortberg at a Morgan Stanley conference on Thursday. “The good news is we’ve got five aircraft now into the test program…Both the airplane and the engine are really performing quite well.” The bad news? Boeing is falling behind on the certification, he added.

Deliveries of the new jet could have started in late 2026. That might slip into 2027. Minor delays could have a significant financial impact, said Ortberg. More time means less revenue and the possibility that Boeing could have to compensate airlines for missing delivery dates.

It has sold more than 600 777X jets so far.

Boeing stock fell 1.8%, closing at $215.94, while the S&P 500 was flat and the Dow Jones Industrial Average lost 0.6%.

Shares might also be reacting to a union vote. St. Louis-based IAM Local 837 workers, on strike since early August, rejected a contract that would have raised average pay from about $75,000 to $109,000 over five years. Boeing said it was disappointed with the vote outcome, adding “we will continue to execute our contingency plan, including hiring permanent replacement workers, as we maintain support for our customers.” Boeing makes fighter jets and other products in the St. Louis area.

Boeing shares dropped 3.3% on Thursday, as investors weighed Ortberg’s 777x comments. Certification delays for the 777x, however, shouldn’t cause investors too much trouble in the long run, says BofA Securities analyst Ron Epstein, as long as they only amount to months. Delays aren’t ideal, but Boeing’s main job is to build more planes in 2026 and 2027. More planes mean more cash flow, he says.

Boeing is expected to deliver about 580 planes in 2025, followed by 675 and 760 planes in 2026 and 2027, according to FactSet.

Epstein rates Boeing stock Buy and had a recent $260 price target for shares. Overall, 81% of analysts covering Boeing stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst price target is about $260 a share.

Coming into Friday trading, Boeing stock was up about 24% year to date. Lately, investors have been encouraged by the company’s efforts to improve quality and production rates.

Write to Al Root at allen.root@dowjones.com