Morgan Stanley Drops Bombshell Analysis on Boeing Stock Post-Air India Crash

Wall Street''s heavyweight just took a flamethrower to Boeing''s crisis playbook.

Morgan Stanley''s latest report lands like a wingtip strike—sharp, unexpected, and guaranteed to rattle the hangar. The Air India incident isn''t just another turbulence blip—it''s a full-blown black box mystery that''s got analysts scrambling.

Here''s the kicker: The firm''s calculus suggests Boeing''s ''fixes'' might be financial duct tape on a cracked fuselage. Supply chain snarls? Check. Regulatory scrutiny? Double-check. That sweet, sweet government contract money? Suddenly looking as reliable as a 737 MAX software patch.

One analyst quipped: ''At this point, Boeing shareholders should demand parachutes—not dividends.'' Ouch.

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It’s important to note that this is a different aircraft from the Boeing 737 Max, which made headlines after the deadly crashes in Indonesia and Ethiopia in 2018 and 2019, claiming hundreds of lives. At this stage, there’s no indication that Boeing is at fault for yesterday’s incident in India. A clearer picture of what happened is expected to emerge once investigators retrieve the plane’s black boxes – the onboard recorders that store critical flight data and cockpit audio.

With BA shares taking a beating following the crash, Morgan Stanley’s Kristine Liwag set out to get an idea of how investors feel about the stock right now.

“While our thoughts remain focused on those affected by the tragedy,” the 5-star analyst said, “the feedback from investors is considerably less negative than after previous Boeing 737 MAX incidents.”

On the positive side, given the strong safety history of the 787, many investors believe the stock’s dip is an overreaction, especially as production of the 737 MAX continues to gain momentum. Footage of the incident appears to show a controlled descent, which could suggest that the cause may not be related to a systems failure on the aircraft itself.

But the negative take is that incidents like this highlight the stock has a “higher beta than in previous cycles,” i.e., heightened sensitivity to headlines. Boeing remains “in the penalty box” due to prior incidents and with a range of pureplay aerospace alternatives available, many WOULD prefer to remain on the sidelines for now.

Plenty of questions remain for now. Some observers have noted that the aircraft appeared underpowered during its controlled descent. Investors are asking whether the problem could be related to the engines, maintenance or repair (MRO) issues, or possibly a bird strike. The Air India 787 is equipped with GE Aerospace engines.

“We will continue to monitor developments of the investigation,” Liwag summed up.

All in, Liwag assigns an Equal-weight rating (i.e., Neutral) with a $200 price target, suggesting that the stock is fully valued at current levels. (To watch Liwag’s track record, click here)

While two other analysts also remain on the sidelines, they’re outnumbered by 16 who are bullish on the stock. With just one dissenter issuing a Sell, the result is a Strong Buy consensus. Looking ahead, the average price target of $220.95 implies potential upside of 10.5% over the next year. (See)

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