Here’s What To Expect From Boeing’s Q2

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BA: The Boeing Company logo
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The Boeing Company

Boeing (NYSE: BA) will report its Q2 2023 results on Wednesday, July 26. We expect the company’s revenues to come in at $18.2 billion, slightly below the consensus estimate of $18.3 billion. This would mark year-over-year growth of about 9%. We expect the company to post a loss of $0.94 per share on an adjusted basis, slightly below the consensus estimate of $0.89 loss per share. See our interactive dashboard analysis on Boeing Earnings Preview for more details on how the company’s revenues and earnings will likely trend for the quarter. So, what are some of the trends that are likely to drive Boeing’s results?

The company will likely continue to benefit from the robust travel demand. As airlines see their profits rise, more orders are being placed for new aircraft. Boeing has been working on increasing its production and deliveries, which struggled over recent years partly due to supply chain issues. Looking at Q1 2023, Boeing’s revenues were up 28%, led by a 37% rise in total deliveries of 130 commercial airplanes compared to 95 in the prior-year quarter. The company’s Defense, Space, & Security segment also saw a good 19% sales growth in Q1, with contracts awarded from the U.S. Army and the U.S. Air Force.

Looking at the bottom line, Boeing reported a $1.27 loss per share on an adjusted basis in Q1, compared to a $2.75 loss per share in the prior-year quarter. Higher inflation in recent years has resulted in increased costs for U.S. companies, including Boeing, which saw its G&A expenses surge 51% in Q1. Supply chain issues also weighed on the operating margin expansion in the recent past. Boeing saw a sharp decline in operating margin from -3% in 2019 to -22% in 2020 due to the impact of the pandemic, and it has gradually recovered to -5% in 2022. Our Boeing’s Operating Income Comparison dashboard has more details. The company’s -2.5% core operating margin in Q1 was much better than -10.3% in the prior-year quarter.

Looking at BA’s stock price, we believe that it has little room for growth. We estimate Boeing’s valuation to be $228 per share, only 7% above its current market price of $213. Our forecast is based on a 1.9x last twelve months’ sales for BA, broadly aligning with its last four-year average of 2.0x. Our Boeing Valuation Ratios Comparison dashboard has more details. The company has guided for 400 to 450 737 airplane deliveries in 2023.

While Boeing stock looks like it has little room for growth, check out how other Boeing Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a portfolio that aims for long-term growth? Here’s a value portfolio that’s done much better than the market since 2016.

Returns Jul 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 BA Return 1% 12% 37%
 S&P 500 Return 1% 17% 101%
 Trefis Multi-Strategy Portfolio 4% 24% 299%

[1] Month-to-date and year-to-date as of 7/17/2023
[2] Cumulative total returns since the end of 2016

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