Will Boeing stock recover? Follow the company's tailspin after door plug disaster

Boeing shares fell to near bear-market status this week after Wells Fargo downgraded its stock on concerns the company will discover more problems during a pending Federal Aviation Administration audit.

Boeing’s fleet of 737 MAX 9 jets remains grounded following the explosive loss of a door plug aboard Alaska Airlines Flight 1282 at 16,000 feet on Jan. 5. The aircraft landed safely.

The FAA began temporarily grounding MAX 9 jets on Jan. 6 but expanded the order for additional safety checks on Jan. 9. The agency notified Boeing on Jan. 11 that it would investigate whether the company “failed to ensure completed products conformed to its approved design.” 

At least 171 jets are prohibited from flying. Boeing shares have dropped nearly 20% since Jan. 1.

How Boeing stock declined

The Wells Fargo report titled, “FAA audit opens up a whole new can of worms,” says Boeing has a history of quality control problems and notes the FAA could find additional problems with the MAX 9 and other MAX models. The report was made public on Tuesday.

Analysts cut the stock value from Overweight to Equal Weight. That changed the price target to $225 per share from $280.

How Boeing's stock performance compares to S&P 500

As investigations continue into the door plug loss, Boeing named retired Adm. Kirkland Donald as a special adviser to the company. Donald will lead a team of experts in reviewing Boeing's quality management system, the company said Tuesday.

The FAA took an additional step on Wednesday and announced it will investigate Boeing's manufacturing practices and production lines. The agency will also examine the work of Spirit AeroSystems, a Boeing subcontractor that manufactures and installs door plugs on MAX 9 aircraft.

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SOURCE Paste BN Network reporting and research; Associated Press; FactSet; Boeing