Boeing Stock To $233?

Boeing (BA) stock has fallen 17% during the past month, and is currently trading at $179.70. Our multi-factor assessment suggests that it may be time to buy more shares of BA stock. We have, overall, a positive view of the stock, and a price of $233 may not be out of reach. We believe there are a few things to fear in BA stock given its overall Moderate operating performance and financial condition. Considering stock’s Low valuation we think it is Attractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $137 Bil in market cap, Boeing provides design, manufacturing, sales, and support for aircraft, satellites, missile defense, space systems, and offers financing services managing equipment lease portfolios.

[1] Valuation Looks Low

This table highlights how BA is valued vs broader market. For more details see: BA Valuation Ratios

[2] Growth Is Very Strong

• Boeing has seen its top line grow at an average rate of 10.1% over the last 3 years
• Its revenues have grown 10% from $73 Bil to $81 Bil in the last 12 months
• Also, its quarterly revenues grew 30.4% to $23 Bil in the most recent quarter from $18 Bil a year ago.

This table highlights how BA is growing vs broader market. For more details see: BA Revenue Comparison

[3] Profitability Appears Very Weak

• BA last 12 month operating income was $-8.4 Bil representing operating margin of -10.4%
• With cash flow margin of -4.6%, it generated nearly $-3.7 Bil in operating cash flow over this period
• For the same period, BA generated nearly $-9.8 Bil in net income, suggesting net margin of about -12.2%

This table highlights how BA profitability vs broader market. For more details see: BA Operating Income Comparison

[4] Financial Stability Looks Strong

• BA Debt was $53 Bil at the end of the most recent quarter, while its current Market Cap is $137 Bil. This implies Debt-to-Equity Ratio of 39.1%
• BA Cash (including cash equivalents) makes up $23 Bil of $150 Bil in total Assets. This yields a Cash-to-Assets Ratio of 15.3%

[5] Downturn Resilience Is Very Weak

BA has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• BA stock fell 57.0% from a high of $269.19 on 12 March 2021 to $115.86 on 13 June 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $264.27 on 17 December 2023 , and currently trades at $179.70

 
2020 Covid Pandemic

• BA stock fell 72.7% from a high of $347.45 on 12 February 2020 to $95.01 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high

 
2008 Global Financial Crisis

• BA stock fell 72.6% from a high of $107.23 on 25 July 2007 to $29.36 on 3 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 July 2013

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read BA Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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