A ceremony is planned today for the 787 Dreamliner from Boeing Co. (NYSE: BA) to receive its final certification from the US Federal Aviation Administration that the plane is safe to fly. The first delivery of an aircraft is scheduled for September 25th to Japan’s All Nippon Airways Co. Ltd. (OTC: ALNPY).

After more than three years of delays, the composites-based Dreamliner is expected to be a game-changer for Boeing. The company claims 827 of the planes have been ordered at a list price of $185.2 million each for a 787-8 and $218.1 million for a 787-9. The 787-8 carries up to 250 passengers on flights of 7,650-8,200 nautical miles, and the 787-9 carries up to 290 passengers on flights of 8,000 to 8,500 nautical miles.

Boeing completed flight testing of the General Electric Co. (NYSE: GE) engine-powered Dreamliner last Saturday. Certification of the Rolls Royce-powered planes is still to be completed.  This will ultimately be a potential game-changer for the long-haul carriers like  United Continental Holdings, Inc. (NYSE: UAL) and AMR Corporation (NYSE: AMR) who make significantly higher profits from overseas flights.

The company is still not out of the woods on every detail though. In addition to being years late, the Dreamliner is also billions of dollars over budget, although the company has not published a figure.

On top of that, the company faces a complaint from one of its unions and the National Labor Relations Board for building a non-union assembly plant in South Carolina as retribution for union strikes in Washington state.

There is also a massive inventory of partially-completed planes and parts that is valued at $16.2 billion according to Bloomberg.  It could takes months to work through the inventory glut. By 2013, Boeing expects to build 10 787s a month.

Boeing currently plans to deliver fewer than 14 of the new Dreamliners in 2011. Until the inventory and production issues are worked through, the company’s stock will continue to feel the weight.

Of 28 analysts’ ratings, there are 18 ‘buy’ recommendations and no ‘sell’ recommendations, according to MarketWatch. Boeing’s trailing P/E is around 15, and its forward P/E is 11.56.

Given the inventory, production, and union problems, though, Boeing stock might be better rated at ‘hold’. The average price target is $90/share. The stock is trading up about 1.3% near noon today, at $61.93, in a 52-week range of $56.01-$80.65. It’s difficult to see the shares gaining 50% until it smooths out production and delivery of the Dreamliner.

Paul Ausick

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