Boeing Stock Analysis

Boeing (BA) Stock Analysis

Surely you’ve heard of Boeing (NYSE: BA)? The world’s largest aerospace manufacturer and the third largest defense contractor? Chances are that if you have ever been on an airplane, you’ve used a Boeing product. But Boeing has much more going on than just its commercial airline manufacturing. The company has four segments: Boeing Commercial Airlines, Boeing Defense, Space & Security, and Boeing Global Services and Capital. So, what does that mean for Boeing’s stock analysis?

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Boeing itself was established back in 1916 in Seattle, Washington.

Aviation pioneer William E Boeing founded it, which was originally called the Aero Products Company.

As of 2022, Boeing is the largest US exporter of goods by dollar value and has over 141,000 global employees.

As of April, the company has a market cap of USD 89 billion.

It’s one of the more influential stocks on the market. Boeing is a component of the Dow Jones Industrial Average and the S&P 100. So, what does that mean for Boeing’s stock analysis?

Boeing itself was established back in 1916 in Seattle, Washington.

Aviation pioneer William E Boeing founded it, which was originally called the Aero Products Company.

As of 2022, Boeing is the largest US exporter of goods by dollar value and has over 141,000 global employees.

As of April, the company has a market cap of USD 89 billion.

It’s one of the more influential stocks on the market. Boeing is a component of the Dow Jones Industrial Average and the S&P 100. So, what does that mean for Boeing’s stock analysis?

Boeing Stock Analysis and Performance

It hasn’t been the best few years for Boeing shareholders, which is true even before the COVID-19 pandemic.

The company’s shares have decreased by nearly 20% over the past five years and more than 35% over the past 52 weeks. 

Boeing was once a blue-chip stock, but the erosion of global travel during the pandemic showed its weakness.

Not only did Boeing lose much of its market cap over the past few years, but it also stopped paying its dividend to shareholders. In addition, with no travel came a stoppage in airplane orders from airline companies

On the bright side, with global travel reopening, Boeing has built up a backlog of orders. According to its recent earnings call,

Boeing has a backlog of 4,200 planes valued at over $291 billion. This is one company welcoming the resurgence of global travel with open arms! 

Boeing Stock Analysis Example

Boeing’s Product Line: Defense and Military

Boeing has a vast product lineup. While most consumers will recognize its commercial airline models, much of the company’s value lies in its other segments. Take Boeing Defense, for example.

Boeing currently has a $60 billion backlog in defense orders, with the US military being one of its largest customers.

Here are some of the defense and military aircraft that Boeing makes and how they affect Boeing’s stock analysis.

1. AH-64 Apache Helicopter

This US Army model is the world’s most advanced and proven attack helicopter. Over 1.3 million have been to combat since its inception in 1984. Boeing owns the production contract until 2028 and is the chosen attack helicopter for the next few decades. Some of the most powerful militaries in the world use the AH-64 Apache, including the US, Japan, the UK, and Israel. 

2. B-52 Bomber

One of the more widely known military aircraft, the B-52, is in its sixth decade of operational service. It is the most combat-capable bomber and an exclusive vessel for the US military. The plane carries over 70,000 lbs in armaments and is crucial to the US national defense strategy. 

3. Air Force One

The official airplane of the President of the United States, the Boeing 747-8, has carried everyone from Roosevelt to Biden. Air Force One is a massive plane with a longer flight range, personal offices and quarters for the President and First Lady, and even two galleys serving up to 100 meals at a time. The plane has over 4,000 square feet of floor space and includes state-of-the-art navigation technology

4. V22 Osprey

The tagline for the V22 Osprey is that it is “unlike any aircraft in the world.” It combines the tilt rotors and vertical agility of a helicopter and the speed and range of an aircraft. As a result, the Osprey is one of the most versatile aircraft that Boeing makes and exclusively serves the US and Japanese militaries. 

Boeing’s Product Line: Commercial Aircrafts

Boeing makes most of the world’s commercial airplanes and owns a near duopoly on the market with Airbus. So, if you have traveled domestically or internationally, chances are you have flown on a Boeing aircraft. Here are some of Boeing’s commercial aircraft.

1. Boeing Stock Analysis: Boeing 777

The 777 is built with long-range fuel efficiency and passenger comfort.

It is most often used for international flights and is one of the most frequently used airplanes worldwide.

The company also has the 777X, the world’s most efficient twin-engine jet, when it hits the air in 2025.

The 777 is used by most of the world’s airlines, including Japan Airlines, Emirates, Cathay Pacific, United, and KLM.

2. Boeing 787 Dreamliner

Another long-range, massive aircraft, the 787 Dreamliner, has operated since 2011. Improved fuel efficiency and range have made this one of Boeing’s most profitable aircraft per passenger flight. It is also used by some of the world’s largest airlines, including British Airways, Air Canada, Air China, and Singapore Airlines.

3. Boeing 747

Another versatile aircraft that operates as one of the main freighter planes in the world. The 747 can carry massive cargo and seat 400 passengers, combining the best of both worlds. This duality allows Boeing to capture maximum profits from these planes. The Boeing 747 is used by UPS, Nippon Cargo, and Lufthansa, amongst others. 

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Boeing Stock Analysis and the 737-Max Controversy

You have probably noticed that I did not include what is probably Boeing’s most well-known model: the infamous 737 Max.

The Max is the fourth generation of Boeing’s 737 planes and has been in the air since 2017.

Most negative headlines stem from two tragic fatal plane crashes in Indonesia and Ethiopia.

The problems with the plane stemmed from its MCAS or Maneuvering Characteristics Augmentation System. As a result, flight authorities like the FAA and airlines worldwide banned the 737-Max from being in use. As a result, the first iterations of the plane were a colossal failure for Boeing, causing a major drop in its stock. 

Most major flight authorities have recertified the 737-Max for flight again after Boeing corrected the MCAS issues. The company has stated that it hopes to deliver the rebuilt planes to airlines by the end of 2023. 

Boeing Stock Competition

As mentioned, there is not much competition in the commercial aviation industry. However, Boeing has more competition in the defense and military segment, so let’s look at some other stocks in Boeing’s industry. 

1. Airbus SE (EPA: AIR)

Airbus is a European multinational aerospace company that was established in 1970. The company is based in several major European cities, including Hamburg, Germany, Toulouse, France, Madrid, Spain, and Leiden in the Netherlands. Airbus has several segments, including Commercial Aircraft, Defense and Space, and Helicopters—the company partners with several notable airlines, including Delta, Lufthansa, and American Airlines. 

2. Lockheed Martin (NYSE: LMT)

Lockheed Martin is one of America’s largest aerospace and defense companies. The company was established in 1995 and is based in Bethesda, Maryland. Lockheed Martin’s well-known vehicles include the Black Hawk Helicopter, the F-16 Fighting Falcon fighter jet, and the Sikorsky line of military helicopters. The company also deals in military technology with UAVs, state-of-the-art navigation, and even unmanned aircraft technology. LMT stock is a component of the S&P 100 and has a market cap of $118 billion. 

3. Raytheon (NYSE: RTX)

Raytheon is yet another American aerospace and defense company. The original company was founded in 1922, and its current iteration is a merger between Raytheon and United Technologies. Its segments include Collins Aerospace, Pratt & Whitney, Raytheon Intelligence & Space, and Raytheon Missiles & Defense. Raytheon’s stock is a component of the S&P 100 and has a market cap of $146 billion. 

Final Thoughts: Boeing Stock Analysis

Boeing’s general stock weakness is a culmination of several headwinds for the company. First, the COVID-19 pandemic was detrimental to global air travel and seriously impacted the company’s revenues. Second, Boeing already had bearish sentiment due to its ongoing issues with the 737-Max model. Third, recalls and malfunctions are one thing, but investors do not soon forget multiple fatal crashes. Finally, eliminating the company’s quarterly dividend is another factor for long-term investors. 

As it stands, Boeing’s stock is grasping for a bottom on its recent downtrend. The recent quarterly earnings weren’t great; the company reported a year-over-year revenue decline. One positive for Boeing is that the worst COVID-19 pandemic is behind us. In addition, global travel has opened up in a major way, which should help Boeing work through some of its order backlogs.

Boeing might be worth looking into for value investors as a long-term investment. The stock is trading at a price-to-sales ratio of 1.6. Shares are trading below the key 50-day and 200-day moving averages, which indicates a long-term downtrend. The thing with Boeing is it is not going anywhere. The company’s business is set to explode in the next year or two, and this could be a near-term bottom on the stock. This is not financial advice, but Boeing’s stock looks ripe for a rebound over the next few years. 

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