CNBC’s Jim Cramer on Monday advised investors to wait for Boeing shares to pull back more before buying the dip on the airplane maker’s latest regulatory issue.
Boeing shares dropped more than 3% to start the week following reports that the Federal Aviation Administration told the company that approval of its 777X jet could take at least another year, calling attention to multiple technical mishaps with the long-range aircraft. But while Monday’s decline was Boeing’s biggest one-day drop since May, Cramer thinks the stock can be bought at lower levels.
“It looks like the Federal Aviation Administration is taking a very hard line with Boeing’s new planes,” Cramer said on “Mad Money.” “If you like Boeing, please keep your powder dry. I think you can get a better chance to buy it at lower levels.”
With CFO Greg Smith set to retire, Cramer suggested that Boeing could feel the need to issue additional shares in the company, which could hit the stock price.
“The company is adamant that there’s no need to worry about the pushed back timeline … but I’ve got to tell you I think this is more about the tenor. The FAA must really despise these guys,” he said. “After all the recent safety issues, can you blame them?
The delay adds a new problem to Boeing’s plate as it jockeys to get the popular selling 737 Max approved to fly again in China, Cramer noted.
China, a key market, was the first country to ground the jets in 2019 after they were involved in two deadly crashes within five months. The Biden White House is working with Boeing to help gain approval from Chinese regulators six months after Western nations cleared the Max jets to return to the skies.
–Reuters contributed to this report.
Disclosure: Cramer’s charitable trust owns shares of Boeing.