Text size

Global aviation oversight authorities met in Montreal Monday to discuss Boeing’s grounded 737 MAX jet.

The meeting held promise for all stakeholders—from airlines to investors—who are hungry for MAX updates. Regulators, after all, are the ones in charge of allowing re-entry to service. Not a lot came out of the Montreal meeting though. Still, Boeing stock (ticker: BA) appears to reflect a growing belief that the company’s timeline will be met. Investors, however, should be careful to avoid complacency in the current MAX information vacuum.

Boeing shares are down about 11% since the second tragic crash of the MAX involving an Ethiopian Airlines flight. But shares are up almost 18% since Aug. 14 when Boeing stock hit $320.42; the Dow Jones Industrial Average, for comparison, is up about 6% over the same span. The only event between then and now was a September investor conference where CEO Dennis Muilenburg reiterated the company’s timeline and commitment to safety.

The Montreal meeting was the next big event, following the investor conference, for stakeholders. And the Federal Aviation Administration, or FAA, spoke—sort of. The agency released a statement Monday evening reiterating their commitment to return the Boeing 737 MAX to service only after it is safe to do so. The release was thin on new details.

Editor's Choice

“The FAA continues to follow a thorough process, not a prescribed timeline, for returning the aircraft to passenger service,” it said.

The FAA’s reticence to commit to a fixed MAX decision date is appropriate, but it isn’t new. The Monday statement as well as prepared remarks made by FAA Administrator Stephen Dickson at the start of Monday’s event covered no new ground, focusing instead global collaboration and, of course, safety.

“Travelers demand the same high level of safety no matter where they fly,” Dickson said in a statement. “It is up to us as aviation regulators to deliver on this shared responsibility.”

The FAA statements Monday and Boeing’s recent statements targeting a fourth-quarter return of the MAX don’t represent a material update for stakeholders. Instead, they are old statements repeated in the absence of additional information. “No news here, that I can see,” Teal Group consultant Richard Aboulafia told Barron’s when asked about the Monday meeting.

No news might be expected, investors, for instance, can’t expect much openness from the FAA while crash investigations are ongoing. But the market is surprisingly OK with little new information.

“We stand at the end of September with no data package delivered to FAA of aircraft controls, software architecture or hardware changes,” wrote SunTrust analyst Michael Ciarmoli in Monday research report, previewing the Montreal Meeting. What’s more, investors don’t know if global aviation agencies have a unified plan for MAX reintroduction, if more training will be required or if new sensors will be required on the aircraft. There’s a lot people don’t know. But the action of the stock seems to indicate investors believe no news is good news.

Ciarmoli covers aerospace, but doesn’t have a rating on Boeing shares.

Looking ahead, data package submission, detailing Boeing’s proposed fixes for the MAX, is likely the next big milestone. The longer the submission isn’t submitted, however, the higher the probability the Muilenburg fourth-quarter timeline slips. Most analysts believe Boeing’s proposed fixes will take several weeks to review.

But what does that mean for the stock? A small delay for MAX reintroduction, into early first quarter, probably isn’t a big deal for Boeing shareholders. Most airlines aren’t going to rush the MAX into service during the busy holiday season. Anything longer than that and Boeing share could go back to the low end of their post-Ethiopian accident trading range.

Boeing and the FAA weren’t immediately available for comment about the status of Boeing’s FAA submission detailing planned fixes to the MAX jet.

“It’s still a waiting game,” one Wall Street analyst tells Barron’s.

As the calendar turns to October the information dam will have to break. Boeing has its regulatory submissions coming as well as third-quarter earnings and a date with Congress to testify on October 30.

Boeing stock is eking out a 0.11% gain to $377.44 in Tuesday morning trading, after falling 0.6% Monday.

Write to Al Root at allen.root@dowjones.com