(Reuters) – Boeing Co’s stock took another beating on Tuesday as a raft of countries grounded its 737 MAX 8 aircraft, responding to a deadly crash in Ethiopia which has so far knocked $25 billion off the market value of the world’s largest planemaker.
Britain and the European Union joined China, Malaysia, Singapore, Australia and other countries in banning the 737 MAX planes, piling pressure on one of the Dow Jones Industrial Average’s best performing stocks this year.
The shares fell nearly 8 percent to $368.88 in mid-day trade, adding to a 5 percent decline on Monday and putting it on course for its biggest two-day percentage drop since June 2009.
Shares of U.S. airlines were broadly lower in midday trade, with the S&P 1500 airlines index off 1.5 percent.
Southwest Airlines Co and American Airlines Group Inc, which analysts said were among the U.S. airlines most exposed to the Boeing aircraft model at issue, saw their shares fall more than 2 percent.
Boeing shares have delivered a total return – including reinvested dividends – of nearly four times the performance of the full index since U.S. stocks began rebounding from the 2007-09 financial crisis.
(GRAPHIC: Price performance of Boeing in comparison to the Dow Jones Industrial Average – tmsnrt.rs/2NYc7fI)
At least seven of the 24 analysts covering the stock have reviewed their ratings over the last two days, with two downgrades and one price target cut so far, according to Refinitiv data.
DZ Bank became the first brokerage in nearly two years to place a “sell” rating on the stock, while setting a price target of $333 – the lowest on Wall Street.
Brokerage Edward Jones also downgraded the stock to “hold” from “buy”, saying the accidents could result in additional expenses, some order delays and pressure financial results.
The single-aisle 737, the world’s most-sold commercial aircraft, is central to Boeing’s future. The MAX line is the fastest-selling jetliner in the company’s history with more than 5,000 orders booked and a backlog valued at nearly $500 billion at list prices.
The United States will mandate that Boeing implement design changes 2018 April, but said the plane was airworthy and did not need to be grounded.
Boeing defended its aircraft and said it has “full confidence in the safety of the Max.”
Safety experts said it was too early to speculate on what caused Sunday’s crash and black box recorders were yet to yield the cause.
Reporting 2018 Sruthi Shankar in Bengaluru, additional reporting 2018 Amy Caren Daniel and Lewis Krauskopf in New York; Editing 2018 Saumyadeb Chakrabarty and Sweta Singh