RBC Capital analysts report that investor sentiment towards Boeing's (NYSE:BA) progress is critical, with most viewing it as slower than anticipated.
Boeing recently submitted its Product Safety and Quality Plan to the FAA, following directives issued after the Alaska Airlines accident in January.
The FAA has emphasized the need for systemic change at Boeing and will continue its rigorous oversight, including weekly and monthly reviews and additional inspections, according to RBC Capital.
In addition, analysts explained that the FAA will not lift the MAX production cap until satisfied with Boeing's systemic changes, and no specific timetable has been provided.
RBC notes, "most investors view BA's progress as slower than expected," highlighting concerns over the adequacy of Boeing's outlined KPIs for safety and quality improvements.
Analysts add that the FAA's lack of a clear roadmap and the continued production cap could mean this restriction remains in place well into the second half of 2024.
Boeing's focus on the fundamentals of aircraft production has raised concerns about deeper systemic issues that may take longer to address. RBC points out, "The fact that BA is focused on the 'blocking and tackling' of aircraft production has many investors concerned that there might be more systemic and structural issues at BA that will take a long time to improve."
Investors are also keeping an eye on Boeing's upcoming CEO transition, expected to be a significant catalyst for the stock, which RBC believes will remain range-bound until there is better visibility on the management succession expected by September 2024.