Jefferies Cuts Boeing Target to $255 After 777X Delay to 2027 - Flags Up to $4B Q3 Charge

Jefferies trimmed its price objective on Boeing (NYSE: BA) to $255 from $275 after the plan to certify the 777X slipped again, pushing the likely first delivery into 2027. The new target is built off a 5.1% free cash flow yield applied to a 2028 FCF-per-share forecast of $12.95, adjusted for preferred-stock conversion. By the numbers, Jefferies' revision left the target roughly 18% above Boeing's last close of $214.63.

Management has signaled the 777X certification timeline is running late even as Boeing works with the FAA on additional Type Inspection Authorization phases to rack up flight credits. There have been some wins - a fifth test aircraft flew in August - but the latest delay still carries a hefty financial sting, Jefferies' team led by Sheila Kahyaoglu warned.

The broker now flags the risk of a one-off, non-cash hit up to about $4 billion in the September quarter. That figure would cover extra customer concessions, production disruption and the cost of reworking inventory. Boeing reportedly has $1.1 billion of deferred production to write off; the remainder of any charge would likely land in accrued liabilities. If the 18 jets penciled in for 2026 aren't delivered, Jefferies models roughly a $2 billion free-cash-flow hit for that year.

It's worth remembering how costly this program has already been. Since an intended 2020 entry-into-service date, the 777X program has generated more than $10 billion in charges - including a $6.5 billion reach-forward loss in 2020 tied to the pandemic and program changes, a $1.5 billion abnormal-cost hit when production paused in 2022-23, and additional 2024 write-ups related to higher costs and a union deal.

Jefferies pushed down its short‑term FCF outlook. The firm now expects cash flow outflows of $2.6 billion in 2025 and $3.5 billion in 2026 (previously modeling a $5.5 billion outflow for 2026), then a $7.3 billion draw in 2027. For the 777X itself, Jefferies projects program cash use of about $3.9 billion in 2025 and $3.4 billion in 2026 before easing as deliveries eventually ramp.

On the flip side, the bank still sees a recovery beyond those years: FCF climbing toward $10.6 billion in 2028 and roughly $13 billion in 2029 if deliveries materialize as hoped. The 777X backlog sits at roughly 565 jets, with Emirates and Qatar Airways holding the largest slices; production is expected to ramp to about 60 aircraft per year between 2027 and 2031.

So the story for Boeing (NYSE: BA) is now very cash-flow centric: timing of certification controls near-term hits, while the long-term program economics still depend on the pace of deliveries and how much more gets written down along the way.