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Spirit AeroSystems (NYSE:SPR) stock is up an impressive 13% today amid rumors that the parts maker may be acquired by Boeing (NYSE:BA). Indeed, according to a person familiar with the matter, Boeing is in talks to repurchase Spirit, which currently produces the fuselages for Boeing’s 737 Max jets. Despite this, BA stock continues to trend in the red today, down more than 1%.
Spirit was once a subsidiary of Boeing, until it was spun off into its own company back in 2005. As it stands, roughly 70% of Spirit’s revenue comes from Boeing. Most of the rest of its revenue comes from Boeing’s primary competitor, Airbus (OTCMKTS:EADSY).
While it’s still yet a rumor, this repurchase would make sense, given recent controversies. It appears the potential buyout comes as both companies move to correct now-infamous flaws with the 737 planes — flaws that have eaten away at Boeing stock lately. Indeed, BA stock is down about 20% year-to-date (YTD) on struggles with glaring quality-control issues related to Boeing’s 737 jets.
If you recall, back in January, the door plug of a Boeing 737 Max 9 plane blew out during an Alaska Airlines (NYSE:ALK) flight. After that, the Federal Aviation Administration (FAA) temporarily halted all 737s from flying amid investigations into the accident and the company’s production systems.
Earlier this week, FAA Administrator Mike Whitaker said that Boeing has “90 days to come up with a plan to improve its quality control and safety systems,” per CNBC.
According to a preliminary report, bolts on the door plug of the Alaska Airlines plane were not attached when it left the factory.
SPR Stock Climbs Into the Green for the Year
After today’s jump, SPR stock is actually up this year. Indeed, assuming the company holds onto its gains to the bell, SPR stock will be up about 6% YTD.
SPR has been an unfortunate casualty of Boeing’s woes in 2024. While Spirit AeroSystems has generally struggled financially, it has some interesting potential deals on the horizon with both Boeing and Airbus. Should Boeing buy out the company, that would also help Spirit shore up its finances.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the biedexmarkets.com.com Publishing Guidelines.
