Canadian aviation regulator Transport Canada said that it has completed simulator and flight tests of the aircraft manufacturer’s 737 MAX 8 jetliner. Shares of Boeing closed nearly 1% higher on Friday.
Boeing’s (BA) 737 MAX 8 aircraft have been grounded worldwide since mid-March 2019 after 346 people lost their lives in two fatal crashes within six months.
The completion of test flights by Transport Canada raises early hopes for returning the grounded jet to service. However, Transport Canada cautioned that it “will not lift the flight restrictions on the Boeing 737 MAX 8 until the department is fully satisfied that all safety concerns have been addressed by the manufacturer and the FAA (Federal Aviation Administration), and that enhanced flight crew procedures and training are in place.” (See BA stock analysis on TipRanks).
On Aug. 11, Cowen analyst Cai Rumohr had said that Boeing’s 787 deliveries remain depressed in July despite easing COVID-19 related travel restrictions. Rumohr also noted that though the rate of cancellations for MAX aircraft has eased, it is still present. The analyst reiterated his Hold rating on the stock as well as the price target of $150 (14.7% downside potential).
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 6 Buys, 8 Holds, and 2 Sells. With shares down about 46% year-to-date, the average price target of $187.63 implies upside potential of 6.7% to current levels.
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