While Boeing’s commercial business faces some challenges, its defense business is starting to see some positive trends thanks to foreign military sales. Boeing projects significant improvement in its business over the next two to three years. By 2025 or 2026, it aims to generate $100 billion of revenue at a 10% operating margin, implying $10 billion of operating profit. It also expects to generate $10 billion of free cash flow, up from an estimated $3 billion to $5 billion in 2023. Boeing did not give any financial guidance for 2024 as it reported its quarterly earnings, amid scrutiny over the Alaska Airlines blowout. As such, Boeing declined to provide guidance for 2024 sales as it typically does in its first earnings call of the year.
Shares of Boeing (BA -0.58%) have been on a tear for much of the past year, rising 50%. In fact, Boeing stock has nearly doubled since bottoming out at the end of September last year. The stock extended its gains last week, rallying 13% as investors continued to grow more optimistic about the company’s turnaround. For the next few quarters, at least, while Boeing fixes its 737s, investors are just going to have to get comfortable flying blind.
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- The knowledge of the aircraft accident fell out of the clear blue sky, so to speak.
- Management has said paying down debt is a priority before the company can resume payouts.
However, air travel demand is already starting to moderate in some regions following a massive boom that began in 2022. If that trend continues, airlines will pivot to deferring or canceling orders rather than placing new ones, making it hard for Boeing to grow beyond its 2026 targets. Boeing will have to devote all of its free cash flow to debt reduction until at least 2026 to repair its balance sheet. That means Boeing stock’s performance will be driven solely by changes in the company’s market cap, with no help from dividends or share buybacks. For Boeing to deliver 10% annualized returns, its market cap would have to jump to around $200 billion by the end of 2026. As you can see below, the ongoing impact of the pandemic on aircraft demand has led Boeing to cut its production rates on the 787 and 777 wide-body programs, while it’s far from clear where 737 MAX orders will go in the future.
Aerospace and Defense
On May 29, 2021, Boeing agreed to pay $17 million in fines as part of a Federal Aviation Administration settlement over installing unapproved sensors on 737 Max and 737 Next Generation aircraft. To help preserve cash, Boeing suspended its dividend on March 20, 2020. It also extended until further notice its pause on share buybacks.
Alphabet, Roper Technologies fall; Boeing, Paramount rise, Wednesday, 1/31/2024
The United Arab Emirates will receive Boeing EA-18G Growler electronic warfare planes as part of a major U.S. arms deal after normalizing ties with Israel last year. Improving ties between Israel and other U.S. allies in the Mideast could unlock more deals. BA stock has been on a wild ride, hit first by the Boeing 737 Max fallout, then by the global travel recession caused by the Covid-19 pandemic. Adam Levine-Weinberg has no position in any of the stocks mentioned.
However, the aircraft’s grounding following some high-profile crashes damaged confidence, and now Boeing is struggling to ramp production to deliver its backlog. Worse, it’s come under criticism from leading figures in the industry (Ryanair’s CEO Michael O’Leary and giant leasing company Avolon CEO Domhnal Slattery) over its leadership and its failure to deliver aircraft on time. While many stocks in the sector have outperformed the market in 2022, and a few (Raytheon Technologies, AAR Corp, and Hexcel) are actually in positive territory, Boeing stock is down a whopping 36% in 2022, and 48% over the last year.
Sales & Book Value
For instance, the terrorist attacks of September 11, 2001, and more recently, the COVID-19 pandemic, significantly affected air travel and consequently impacted Boeing’s stock price. Furthermore, strong aircraft demand will enable Boeing to boost commercial jet production, supporting that segment’s margin recovery. The biggest question mark is how long it will take Boeing to stabilize its struggling defense and space unit. Boeing delivered 157 commercial airplanes to its customers in Q4 and recorded net orders for 611 aircraft, indicating strong prospects for future sales growth.
The Stingray is only one of many areas of research that also include drones and undersea vehicles. The company is facing pressure tokenexus from Dubai-based airline Emirates over the 777X delays. Boeing also said it was in talks to sell a cargo version of the aircraft.
Who is Boeing’s CEO?
Finder monitors and updates our site to ensure that what we’re sharing is clear, honest and current. Our information is based on independent research and may differ from what you see from a financial institution or service provider. When comparing offers or services, verify relevant information with the institution or provider’s site. The origins of Boeing trading can be traced back to the company’s founding in 1916. Boeing, originally known as Pacific Aero Products Company, was established by William Boeing in Seattle, Washington. Initially focused on aircraft manufacturing, Boeing quickly gained recognition for its innovative designs and quality craftsmanship.
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The chipmaker gave investors a weak revenue forecast for its current quarter. “Spirit has implemented changes to its manufacturing process to address this issue. We are working closely with our customer to address any impacted units within the production system and address any needed rework,” the company said. Boeing Co BA shares are trading lower Thursday after the company warned of delivery delays due to a manufacturing defect. As those examples show, the SEC is not shy in hunting for insider trading in novel circumstances.
As Boeing continues to innovate and shape the future of aviation, trading its securities remains an enticing opportunity for investors to profit from the company’s success and market dynamics. Despite these challenges, Boeing trading has remained a popular choice among investors seeking exposure to the aerospace industry. The company’s strong brand reputation, extensive product portfolio, and global presence continue to attract traders looking to capitalize on Boeing’s performance.
The problems began in September 2020 when the FAA said it was looking into manufacturing flaws in the aircraft. Eight 787s were removed from service by airlines in response to the FAA’s investigation. Boeing has a large backlog that covers several years of production for the most popular aircraft, which gives us confidence in aggregate demand for aerospace products. The approval of Covid-19 vaccines helped the stock but earnings will likely remain under pressure for a while as the International Air Transport Association, a trade group, doesn’t see air travel rebounding to 2019 levels until 2024.
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