Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500

The Boeing Company

Recommendation Price 12-Mo. Target Price Report Currency Investment Style
SELL « « « « « USD 183.14 (as of market close Apr 05, 2024) USD 164.00 USD Large-Cap Blend
Equity Analyst Stewart Glickman, CFA

GICS Sector Industrials Summary Boeing is one of two global suppliers of large commercial aircraft alongside its main
Sub-Industry Aerospace and Defense competitor, Airbus, and is also one of the top five U.S. defense contractors.

Key Stock Statistics (Source: CFRA, S&P Global Market Intelligence (SPGMI), Company Reports)
52-Wk Range USD 267.54 - 176.25 Oper.EPS2024E USD 1.75 Market Capitalization[B] USD 111.74 Beta 1.52
Trailing 12-Month EPS USD -5.82 Oper.EPS2025E USD 6.85 Yield [%] N/A 3-yr Proj. EPS CAGR[%] NM
Trailing 12-Month P/E NM P/E on Oper.EPS2024E 104.65 Dividend Rate/Share N/A SPGMI's Quality Ranking A
USD 10K Invested 5 Yrs Ago 4,737.0 Common Shares Outstg.[M] 610.00 Trailing 12-Month Dividend N/A Institutional Ownership [%] 60.0

Price Performance Analyst's Risk Assessment

LOW MEDIUM HIGH

BA faces risk from complexity of modern aircraft, cyclical
demand, and high debt. Technical errors can result in
tragic loss of life and billions in liabilities. This was the
case with 737 MAX crashes and grounding (2018-2020)
the delivery halt on the 787 (2021-2022), and now the
incident on Alaska Air 1282 (in January 2024). Airlines also
carry high financial risk, sometimes failing to meet
purchase commitments. BA’s defense business is more
stable, but it faces unique risks like cost overruns on long-
term fixed-price contracts. Secular demand growth for
new aircraft, and BA’s established position in a duopoly, are
helpful.

Revenue/Earnings Data

Revenue (Million USD)

1Q 2Q 3Q 4Q Year
2025 E 21,765 E 22,030 E 22,195 E 22,670 E 88,660
Source: CFRA, S&P Global Market Intelligence
2024 E 16,245 E 18,680 E 19,860 E 21,000 E 75,785
Past performance is not an indication of future performance and should not be relied upon as such.
2023 17,921 19,751 18,104 22,018 77,794
Analysis prepared by Stewart Glickman, CFA on Mar 28, 2024 11:39 AM ET, when the stock traded at USD 191.92.
2022 13,991 16,681 15,956 19,980 66,608
2021 15,217 16,998 15,278 14,793 62,286
Highlights Investment Rationale/Risk
2020 16,908 11,807 14,139 15,304 58,158
u In January 2024, a relatively new Boeing 737 u Our view is Sell. BA faces quality control woes,
Earnings Per Share (USD)
MAX-9, delivered to customer Alaska Airlines in rising regulatory scrutiny, and high debt. Longer
October 2023, had a plug-type door eject from term, we see BA as one of two major providers 1Q 2Q 3Q 4Q Year
the aircraft shortly after takeoff. Per the WSJ, in that will supply the bulk of new commercial 2025 E 1.58 E 1.71 E 1.76 E 1.79 E 6.85
the ensuing investigation, it was determined aircraft to the global market. We do not 2024 E 0.04 E 0.18 E 0.59 E 0.94 E 1.75
that BA did not reinstall necessary bolts for that anticipate large-scale order cancellations, but 2023 -1.27 -0.82 -3.26 -0.47 -5.81
door before delivering the plane to the we do see the risk that new orders may 2022 -2.75 -0.37 -6.18 -1.75 -11.06
customer, and that process documentation was increasingly drift toward Airbus. BA’s consensus 2021 -1.53 0.40 -0.60 -7.69 -9.44
inadequate. earnings estimates for 2024 and 2025 have 2020 -1.70 -4.79 -1.39 -15.25 -23.25
u The FAA has announced a temporary limit on now dropped by 56% and 12%, respectively, Fiscal Year ended Dec 31. EPS Estimates based on CFRA's
737 MAX deliveries to 38 per month; BA has since the start of the year. Yet, consensus Operating Earnings; historical earnings are adjusted. In periods
withdrawn a prior request for a safety recommendations remain largely bullish. where a different currency has been reported, this has been
Implicitly, we think BA bulls continue to assign adjusted to match the current quoted currency.
exemption on the yet-to-be-certified MAX 7,
and has also withdrawn 2024 financial high valuation multiples, but if renewed
attention to quality yields a slower delivery pace Dividend Data
guidance. BA delivered 396 737s in 2023, up 2%
from 2022. The key wild cards for 2024, in our and narrower margins, we think multiples Amount Date Ex-Div. Stk. of Payment
view, are regulatory. FAA decisions on (1) how should compress. ( USD) Decl. Date Record Date
much it slows down production lines for the u Risks to our rating and target include a faster-
2.0550 Dec 16 Feb 13 Feb 14 Mar 06 '20
MAX 8 and 9, and (2) how quickly it certifies the than-expected solution to quality control issues 2.0550 Oct 21 Nov 07 Nov 08 Dec 06 '19
MAX 7 and 10, will be crucial. We estimate that on the 737 MAX; market share gains versus 2.0550 Jun 24 Aug 08 Aug 09 Sep 06 '19
existing orders for the MAX 7 and MAX 10 Airbus (AIR FP EUR172 *****); favorable 2.0550 Apr 29 May 09 May 10 Jun 07 '19
comprise 38% of BA’s total orders for this family regulatory developments; and faster-than-
of narrow-body aircraft. expected elimination of fixed-price contracts in Dividends have been paid since 1971 . Source: Company reports
the defense segment. Past performance is not an indication of future performance
u Backlog for commercial aircraft at the end of
and should not be relied as such.
December 2023 stood at $441 billion, up 34% u Our 12-month target of $164 reflects a 24x
Forecasts are not a reliable indicator of future performance.
from one year earlier, and Q4 unit orders were multiple of projected 2025 EPS. The applied Dividends paid in currencies other than the Trading currency have
up 50%. multiple is slightly below BA’s 10-year historical been accordingly converted for display purposes.
forward average, merited by high regulatory risk.

Redistribution or reproduction is prohibited without written permission. Copyright ©2024 CFRA. This document is not intended to provide personal investment advice and it does not take into account the specific investment
objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek independent financial advice regarding the suitability and/or appropriateness of making an investment
or implementing the investment strategies discussed in this document and should understand that statements regarding future prospects may not be realized. Investors should note that income from such investments, if any,
may fluctuate and that the value of such investments may rise or fall. Accordingly, investors may receive back less than they originally invested. Investors should seek advice concerning any impact this investment may have on
their personal tax position from their own tax advisor. Please note the publication date of this document. It may contain specific information that is no longer current and should not be used to make an investment decision. Unless
otherwise indicated, there is no intention to update this document.
1
Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Business Summary Feb 02, 2024 Corporate information

CORPORATE OVERVIEW. Boeing is one of the world’s leading aerospace firms. BA operates under three Investor contact
primary segments. The Commercial Airplanes segment (BCA: 44% of 2023 revenues) makes 100+ seat M. Welch (703 465 3500)
passenger jets. Along with its main competitor, Airbus, BCA is one of only two large-scale producers of
commercial planes this size. BCA’s most popular aircraft family is the 737 single-aisle family. The 787 family Office
is the next largest component of BCA’s backlog, but 787 deliveries only recently resumed following a halt 929 Long Bridge Drive, Arlington, Virginia, 22202
due to quality control lapses. The company is also developing a next-generation 777X wide-body, featuring
new composite wings, new engines, and folding wingtips. BCA plans to begin delivering the 777X in 2025. Telephone
703 465 3500
The Defense, Space & Security segment (BDS: 32% of 2023 revenues) develops and supports military
aircraft; space systems; missile defense systems; satellites and space vehicles; and communication, Fax
information, and battle management systems. BDS is the fifth largest U.S. Defense contractor. It typically N/A
earns around 85% of its revenues from U.S. government contracts. In addition to the U.S. Department of
Defense, BDS also sells to other government agencies like NASA and to commercial space customers. At Website
year-end 2023, BDS had about 15% of its revenues tied up in fixed-price contracts, which have www.boeing.com
underperformed in an environment with rising cost inflation. We expect BA to gradually shift away from such
contracts in coming years. Officers
The Global Services segment (BGS: 24% of 2023 revenues) offers all manner of maintenance, spare parts, Executive VP & COO Chief Investment Officer
training, and analytics services to customers of both BCA and BDS. BGS is typically Boeing’s most profitable S. F. Pope A. Ward
segment, with major equipment sales leading to high margin long-term contracts for parts and
maintenance. Independent Non- Chief Technology Officer,
Executive Chairman VP and GM of Boeing
CORPORATE STRATEGY. BA’s commercial market outlook sees air traffic growing 3.8% per year from 2022 to L. W. Kellner Research & Technology
2041, vs. fleet growth of just 2.6%. Large passenger jets remain integral to global economic growth that is T. Citron
resuming as the pandemic recedes. To that end, BA employs more than 150,000 people, of whom 31% are Executive VP of Finance &
unionized, spread among three unions. The next collective bargaining agreement to expire, which covers CFO Chief Legal Officer &
20% of BA’s workforce, expires in September 2024. Other agreements extend through 2027. We have B. J. West Executive VP of Global
confidence that Boeing will continue to grow its backlogged order book. However, due to shortages of skilled Compliance
aerospace labor and recent quality control lapses, we expect it will take until at least 2025 for MAX deliveries President, CEO & Director B. C. Gerry
to ramp back to near 2018 levels. D. L. Calhoun
Backlog at the end of December 2023 stood at $520 billion, with 85% of existing backlog in commercial
aircraft orders. At year-end 2023, total orders for commercial aircraft stood at 5,626 units, The key catalysts Board Members
for turning backlog into revenues will likely be FAA certification of the 737 MAX-7 and 737 MAX-10, which A. Johri L. W. Kellner
comprise 38% of the orders within this family of aircraft (and 22% of total commercial aircraft orders). The D. L. Calhoun R. A. Bradway
MAX-9 involved in the Alaska Air incident represents just 2% of undelivered MAX orders, and 15% of delivered
units, in our estimation. D. L. Gitlin R. A. Williams
IMPACT OF MAJOR DEVELOPMENTS. Following two fatal 737 MAX crashes in late 2018 and early 2019, the D. L. Joyce S. D. Harris
flagship model for Boeing was grounded by regulators globally in 2019. The cause of the crashes was an J. M. Richardson S. M. Mollenkopf
integrated software and mechanical system designed to prevent engine stall under certain rare adverse L. J. Good S. Soussan
conditions. BA subsequently cut production of the MAX from its pre-grounding high of 52 planes per month
to zero in January 2020, as the recertification process faced delays and hundreds of undelivered MAX planes L. M. Doughtie
accumulated in storage. Due to the inability to deliver its flagship commercial jet, BCA segment revenues fell
from $57 billion in 2018 to $32 billion in 2019, and then to $16 billion in 2020 as the MAX crisis was Domicile Auditor
compounded by a broader aircraft-demand depression amid the Covid-19 pandemic. In November 2020, Delaware Deloitte & Touche LLP
following extensive safety reviews and testing, the FAA allowed BA to install mechanical, electrical, and
software modifications, and the MAX returned to service in the U.S. Other major market regulators followed Founded
suit in 2021-2022. Despite these delays, major customers of the MAX have remained committed to this 1916
aircraft model due to high switching costs.
Employees
FINANCIAL TRENDS. Boeing revenues hit an all-time high of $101.1 billion in 2018, but were only $67.7 billion 171,000
in 2023 as the company continues to recover from the pandemic and from quality control-related setbacks.
The adjusted EPS peak was $16.01 in 2018, followed by five straight years of multi-billion dollar losses in Stockholders
2019-2023. As of January 2024, we think BA can turn the corner in 2024 to positive profitability, and 84,633
accelerating profitability in 2025. BA believes it can achieve $10 billion in annual free cash flow, but not likely
until 2025 or 2026, and we think this is contingent on (1) eliminating unwelcome surprises in the
manufacturing process, and (2) a solid reopening of the Chinese economy, given its potential impact on
order flow.
BA booked net orders for 398 commercial aircraft in Q3 2023, including 150 737 MAX-10s for Ryanair, and a
total of 89 wide-body 787s for United (50) and Saudi Arabian Airlines (39). Backlog at September 30 stands
at more than 5,100 aircraft, with contract valued of $392 billion. BA delivered 105 commercial airplanes in
Q3 2023, up 25% from the year-ago quarter, but down from Q2 levels. The majority of the deliveries were
737s (70 units).
BA generated a free cash flow surplus of $4.4 billion in 2023, up strongly from $2.3 billion in 2022. Although
BA has pulled its 2024 financial guidance, it has retained a goal of $10 billion in annual free cash flow in the
2025 to 2026 time frame. We think this level of free cash flow is a laudable goal. However, we also think a
path to get there by 2026 depends on a relatively fast approval process from the FAA as well as a quick
improvement in delivery cadence.

Redistribution or reproduction is prohibited without prior written permission. Copyright ©2024 CFRA. 2
Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Quantitative Evaluations Expanded Ratio Analysis

Fair Value Rank NR 1 2 3 4 5 2023 2022 2021 2020

Lowest Highest Price/Sales 2.03 1.70 1.90 2.09
Based on CFRA's proprietary quantitative model, Price/EBITDA 50.07 97.52 70.79 NM
stocks are ranked from most overvalued (1) to most Price/Pretax Income NM NM NM NM
undervalued (5). P/E Ratio NM NM NM NM
Avg. Diluted Shares Outstg. (M) 605.80 594.90 587.60 569.00
Fair Value N/A
Calculation Figures based on fiscal year-end price

Volatility LOW AVERAGE HIGH

Technical NEUTRAL Since October, 2023, the technical indicators for BA Key Growth Rates and Averages
Evaluation have been NEUTRAL"
Past Growth Rate (%) 1 Year 3 Years 5 Years
Insider Activity UNFAVORABLE NEUTRAL FAVORABLE Net Income NM NM NM
Sales 16.79 10.18 -5.11

Ratio Analysis (Annual Avg.)

Net Margin (%) NM NM NM
% LT Debt to Capitalization 127.20 123.99 118.45
Return on Equity (%) 13.56 24.18 35.84

Company Financials Fiscal year ending Dec 31

Per Share Data (USD) 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Tangible Book Value -44.99 -43.93 -43.52 -50.21 -35.56 -19.26 -10.96 -11.42 -2.17 0.96
Free Cash Flow 7.32 3.85 -7.48 -34.64 -7.79 23.33 19.03 12.38 10.05 9.08
Earnings -3.67 -8.30 -7.15 -20.88 -1.12 17.85 13.85 7.83 7.44 7.38
Earnings (Normalized) -5.81 -11.06 -9.44 -23.25 -3.47 16.01 10.30 7.24 7.72 8.60
Dividends N/A N/A N/A 2.06 8.22 6.84 5.68 4.36 3.64 2.92
Payout Ratio (%) NM NM NM NM NM 37.72 40.40 54.75 48.11 38.84
Prices: High 267.54 229.67 278.57 349.95 446.01 394.28 299.33 160.07 158.83 144.57
Prices: Low 176.25 113.02 185.26 89.00 309.40 292.47 155.21 102.10 115.14 116.32
P/E Ratio: High NM NM NM NM NM 24.60 29.10 22.10 20.60 16.80
P/E Ratio: Low NM NM NM NM NM 18.30 15.10 14.10 14.90 13.50

Income Statement Analysis (Million USD)

Revenue 77,794 66,608 62,286 58,158 76,559 101,127 94,005 93,496 96,114 90,762
Operating Income 1,293 -817.00 -473.00 -8,485 -2,102 11,843 10,113 6,988 7,170 7,196
Depreciation + Amortization 1,861 1,979 2,144 2,246 2,271 2,114 2,047 1,889 1,833 1,906
Interest Expense 2,459 2,561 2,714 2,156 722.00 475.00 360.00 306.00 275.00 333.00
Pretax Income -2,005 -5,022 -5,033 -14,476 -2,259 11,604 10,107 5,783 7,155 7,137
Effective Tax Rate -11.80 -0.60 14.80 17.50 71.80 9.90 16.30 13.00 27.70 23.70
Net Income NM NM NM NM NM 10,460 8,458 5,034 5,176 5,446
Net Income (Normalized) NM NM NM NM NM 7,264 6,374 4,447 4,577 4,610

Balance Sheet and Other Financial Data (Million USD)

Cash 15,943 17,187 16,244 25,590 10,030 8,564 9,992 10,029 12,052 13,054
Current Assets 109,275 109,523 108,666 121,642 102,229 87,830 85,194 62,488 68,234 67,767
Total Assets 137,012 137,100 138,552 152,136 133,625 117,359 112,362 89,997 94,408 92,921
Current Liabilities 95,827 90,052 81,992 87,280 97,312 81,590 74,648 50,134 50,412 48,233
Long Term Debt 46,927 51,670 55,487 60,987 18,233 8,501 8,021 6,804 6,875 5,829
Total Capital 36,893 42,734 44,795 46,860 20,232 14,257 12,830 10,829 16,361 17,860
Capital Expenditures 1,527 1,222 980.00 1,303 1,834 1,722 1,739 2,613 2,450 2,236
Cash from Operations 5,960 3,512 -3,416 -18,410 -2,446 15,322 13,346 10,496 9,363 8,858
Current Ratio 1.14 1.22 1.33 1.39 1.05 1.08 1.14 1.25 1.35 1.40
% Long Term Debt of Capitalization 127.20 120.90 123.90 130.10 90.10 59.60 62.50 62.80 42.00 32.60
% Net Income of Revenue -2.90 -7.40 -6.70 -20.40 -0.80 10.30 9.00 5.40 5.40 6.00
% Return on Assets 0.59 -0.37 -0.20 -3.71 -1.05 6.44 6.25 4.74 4.78 4.85
% Return on Equity 13.60 32.90 26.10 90.50 16.10 985.40 653.10 138.40 68.20 45.80

Source: S&P Global Market Intelligence. Data may be preliminary or restated; before results of discontinued operations/special items. Per share data adjusted for stock dividends; EPS diluted.
E-Estimated. NA-Not Available. NM-Not Meaningful. NR-Not Ranked. UR-Under Review.

Redistribution or reproduction is prohibited without prior written permission. Copyright ©2024 CFRA. 3
Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Sub-Industry Outlook Industry Performance

Our fundamental outlook for the Aerospace &
Defense (A&D) sub-industry for the next year is
neutral. We expect growth in U.S. and allied
defense spending over the next several years
following the Russian invasion of Ukraine, in turn
driving healthy sales growth for defense
businesses that make up roughly 65% of sub-
industry revenue. However, much of this boost will
likely be offset by the negative impact of inflation
on fixed-price contracts. We forecast solid Y/Y
top-line growth for commercial aerospace
businesses from depressed 2022 levels, but
earnings will likely still be well below pre-pandemic
peak levels for Boeing and any suppliers with high
exposure to its 737 or 787 programs.
U.S. and allied defense spending is likely to be on a
relatively elevated growth trajectory in the coming
years in the wake of Russia’s atrocities against
Ukraine, in our view, as dovish diplomacy
strategies fall out of favor while defense build-up
and deterrence are in vogue. Additionally, China’s
recent military threats against Taiwan are further
persuading defense doves in Congress to support
a build-up and deterrence strategy, in our view. We
view the recent Israel-Hamas conflict as being
more localized, though, and see it moving the
needle less in regard to global defense spending.
CFRA forecasts 5%-6% annual growth in U.S.
defense spending during 2023-2025, above
trailing 10-year average annual growth of 1%.
While we forecast healthy top-line growth for
defense firms in 2023, margins are likely to be
hurt by persistent high inflation. Defense firms
typically generate 50%-75% of sales on fixed-
price contracts that stretch for years, meaning
much of their 2023 revenues were contracted
before the 2022 inflation surge. Fixed-price
contracts do not typically allow higher-than-
expected costs to be passed on to buyers, putting
defense firms at high risk of weak margins in
2023-2024, in our view. We see firms leveraging
share buybacks to help boost EPS amid reduced
profitability.
After defense, we estimate 35% of A&D revenues
come from commercial aerospace. We think most
global airlines are experiencing record GICS Sector: Industrials
utilization of single-aisle jets amid strong Sub-Industry: Aerospace and Defense
leisure travel demand post-pandemic. We also Based on S&P 1500 Indexes
expect wide-body utilization will fully recover Five-Year market price performance through Apr 06, 2024
over the next 12 months as tourists and
businesses have taken advantage of loosened
international travel restrictions. These trends
are leading to strong orders and backlogs for
the major planemakers, but regulatory and
execution foul-ups at Boeing and global supply
chain suppliers have prevented production
from fully recovering to meet healthy demand.
We see the commercial aircraft supply chain
exiting 2023 at annualized production run
rates still roughly 20% below pre-pandemic
peak, but marking steady improvement versus
2022, down roughly 30%.
An issue that could cause the sub-industry’s
commercial earnings to lag behind the full
demand recovery is Boeing’s excess inventory.
As of July 2023, Boeing had inventory of 228
completed 737s and 85 completed 787s due
to the programs’ safety and/or regulatory
failures. These large inventories will keep
Boeing from fully re-ramping production rates
to near pre-pandemic levels until late 2024 at
the earliest, in our view. In turn, sales volume
for Boeing and key suppliers will likely
materially lag the recovery in air travel demand.
Year-to-date through October 18, the S&P
Aerospace & Defense index fell 5% compared
to a 13% gain for the S&P Composite 1500.
NOTE: A sector chart appears when the sub-industry does not have
/ Jonathan Sakraida sufficient historical index data.
All Sector & Sub-Industry information is based on the Global Industry
Classification Standard (GICS).
Past performance is not an indication of future performance and should
not be relied upon as such.
Source: CFRA, S&P Global Market Intelligence

Sub-Industry: Aerospace and Defense Peer Group*: Aerospace and Defense

Recent 30-Day 1-Year Fair Return
Stock Stock Stk. Mkt. Price Price P/E Value Yield on Equity LTD to
Peer Group Symbol Exchange Currency Price Cap. (M) Chg. (%) Chg. (%) Ratio Calc. (%) (%) Cap (%)

The Boeing Company BA NYSE USD 183.29 111,832.0 -8.9 -12.7 NM N/A N/A 13.6 127.2
Axon Enterprise, Inc. AXON NasdaqGS USD 306.83 23,154.0 -2.6 41.2 133.0 N/A N/A 12.1 29.0
General Dynamics Corporation GD NYSE USD 293.22 80,321.0 7.2 28.0 24.0 283.46 1.9 16.6 27.0
HEICO Corporation HEI NYSE USD 187.90 23,020.0 -0.5 12.6 61.0 155.80 0.1 13.8 39.9
Howmet Aerospace Inc. HWM NYSE USD 65.53 26,887.0 -3.6 55.6 35.0 56.40 0.3 20.0 44.5
L3Harris Technologies, Inc. LHX NYSE USD 209.59 39,841.0 -2.0 6.2 17.0 194.65 2.2 6.4 33.3
Lockheed Martin Corporation LMT NYSE USD 454.04 109,195.0 5.1 -7.3 16.0 388.61 2.8 86.0 67.9
Northrop Grumman Corporation NOC NYSE USD 459.48 68,067.0 0.3 -2.4 20.0 459.81 1.6 13.7 44.7
RTX Corporation RTX NYSE USD 99.31 131,819.0 10.3 0.6 20.0 68.48 2.4 5.0 39.5
Textron Inc. TXT NYSE USD 95.50 18,373.0 6.9 40.7 17.0 114.33 0.1 13.1 28.2
TransDigm Group Incorporated TDG NYSE USD 1,204.36 66,970.0 3.8 66.7 42.0 775.74 N/A -42.5 114.5

*For Peer Groups with more than 10 companies or stocks, selection of issues is based on market capitalization.
NA-Not Available; NM-Not Meaningful.
Note: Peers are selected based on Global Industry Classification Standards and market capitalization. The peer group list includes companies with similar characteristics, but may not include all the companies within the same
industry and/or that engage in the same line of business.

Redistribution or reproduction is prohibited without prior written permission. Copyright ©2024 CFRA. 4
Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Analyst Research Notes and other Company News
March 27, 2024
05:19 PM ET... CFRA Keeps Sell Opinion on Shares of The Boeing Company (BA
191.95**):
Our 12-month target price of $164, cut $8, reflects a 24x multiple of projected 2025
EPS. The applied multiple is slightly below BA’s long-term historical forward average,
but merited, in our view, by high regulatory risk. We cut our 2024 EPS estimate by
$1.42 to $1.75 and 2025’s by $0.32 to $6.85. BA has delivered just 54 commercial
aircraft in the first two months of Q1, a sharp slowdown from 79 units in the same
period of 2023. In our view, this is reflective of the FAA-imposed slowdown on BA’s
flagship 737 MAX production line, and it is too early to determine when that
slowdown may end. We think BA has a long road ahead of it to restore its reputation
for engineering quality, but the recent move of appointing Steve Mollenkopf as
Chairman of the Board is likely a step in the right direction, given Mollenkopf’s
engineering background. We think chief rival Airbus (AIR FP EUR172 *****) will add
to its market share lead over BA in commercial aircraft in 2024. / Stewart Glickman,
CFA
March 25, 2024
10:53 AM ET... CFRA Keeps Sell Opinion on Shares of The Boeing Company (BA
195.50**):
The Wall Street Journal notes that BA’s CEO, David Calhoun, has elected to resign at
year end, the head of its commercial aircraft unit will step down immediately, and
the current Chairman of the Board will not stand for re-election. Despite the shake-
up at the top, we think BA has two major issues that will take time to resolve. The
first is a culture issue. We believe that speed-to-market has been treated by
management as a relatively higher priority than quality for some time, and we note
that Calhoun became CEO following the last crisis in 2018-2019 over the 737 MAX
MCAS software problems. The second issue is innovation. We note that the 737 MAX
is an update of a 50-year-old plane family, and that chief rival Airbus (AIR FP
EUR170 *****) has held a market share advantage over BA in commercial aircraft
deliveries since 2019. In the longer term, BA should still benefit from strong secular
growth trends in new aircraft, but near-term prospects remain very tenuous, in our
view. / Stewart Glickman, CFA
March 12, 2024
11:26 AM ET... CFRA Keeps Sell Opinion on Shares of The Boeing Company (BA
185.96**):
Our 12-month target of $172, cut $22, reflects a 24x multiple on our 2025 EPS
estimate, below BA’s recent historical forward average, on rising regulatory and
operational risk. We cut our 2024 EPS estimate by $0.17 to $3.17 and 2025’s by
$0.59 to $7.17. Southwest Airlines (LUV 29 ***) said today that it sees 42% fewer
deliveries of 737 MAX aircraft from BA in 2024 than originally expected, and, as a
result, would be cutting its capacity in 2024. We view this development as an
illustration of the difficulty in scaling production and tightening quality control
measures at the same time amid heightened regulatory scrutiny. We note that the
Department of Justice has also convened a grand jury over the incident on Alaska
Air flight 1282. We think BA’s ability to deliver planes, for the near term, is going to
suffer. Longer term, BA should still get to benefit from a growing market for new
commercial aircrafts, but we think the current FAA-imposed slowdown on 737
deliveries faces a rising risk of running longer. / Stewart Glickman, CFA
March 01, 2024
03:32 PM ET... CFRA Keeps Sell Opinion on Shares of The Boeing Company (BA
200.31**):
Our 12-month target remains $194 on P/E analysis. The WSJ reported today that BA
is in discussions to acquire key supplier Spirit AeroSystems Holdings (SPR 33 ***).
Should a deal occur, it would bring BA’s relationship with SPR full circle, since SPR
was spun off from Boeing in 2005. We believe the motivation for any such deal is
quality control, as an in-house SPR would likely be easier for BA management to
monitor. Given the recent history of manufacturing snafus in both enterprises, as
well as the Federal Aviation Administration’s requirement that BA deliver a go-
forward plan to address safety deficiencies in 90 days, we think BA is turning over
every stone to prevent more defects from occurring. We note possible complications
for Airbus (AIR FP EUR153 *****), given that SPR also produces fuselages for
Airbus. SPR earned $1.1B in revenues from Airbus in 2023, and we estimate that
SPR comprised about 2.5% of Airbus’ opex in 2023 in its commercial aircraft
business. / Stewart Glickman, CFA
Note: Research notes reflect CFRA's published opinions and analysis on the stock at the time the note was published. The note reflects the views of the equity analyst as of
the date and time indicated in the note, and may not reflect CFRA's current view on the company.
Redistribution or reproduction is prohibited without prior written permission. Copyright ©2024 CFRA.
February 16, 2024
05:51 PM ET... CFRA Keeps Sell Opinion on Shares of The Boeing Company (BA
203.28**):
Our 12-month target price remains $194, reflecting a 25x multiple applied to our
2025 EPS estimate, below BA’s recent historical forward average. We think a
discounted multiple is reasonable in light of elevated regulatory risk. We cut our
2024 EPS estimate by $0.67 to $3.34, but leave 2025’s at $7.76. BA noted recently
that its January production cadence was below the production limit of 38 737-MAX
aircraft that has been temporarily imposed by the FAA. We still think BA will
gradually expand production toward that 38 limit during 2024, but our EPS
reduction in 2024 reflects a slower pace, particularly in 1H 2024. The secular
backdrop for BA remains attractive, given a lot of expected retirements of aging
aircraft over the next 20 years. Nonetheless, taking advantage of that backdrop will
necessitate BA first ironing out its varied quality control issues. / Stewart Glickman,
CFA
January 31, 2024
01:30 PM ET... CFRA Cuts View on Shares of The Boeing Company to Sell from Hold
(BA 211.31**):
Our 12-month target of $194, down from $209, reflects a 25x multiple of projected
2025 EPS, below BA’s recent historical forward average, based on what we see as
high regulatory risk. We lift our 2024 EPS estimate by $0.41 to $4.01 but cut 2025’s
by $0.59 to $7.76. A Q4 operating loss per share of $0.47, vs. a loss per share of
$1.75, was $0.32 better than consensus. The FAA is limiting BA, for now, to a delivery
rate of 38 units per month for its flagship 737 MAX narrow-body aircraft while BA
irons out process and manufacturing deficiencies. We think current consensus EPS
estimates for 2024 and 2025 bake in a fairly rapid recovery in commercial
aerospace deliveries, yet BA pulled forward guidance, and the Alaska Air incident
may induce more caution on the production line. We see a return to profitability in
Commercial Aerospace and Defense segments in 2H 2024, with only a slow uptick in
volumes. BA has an opportunity to earn its way back to the FAA’s good graces, but
solid execution will be key. / Stewart Glickman, CFA
January 30, 2024
01:36 PM ET... CFRA Keeps Hold Opinion on Shares of The Boeing Company (BA
200.54***):
Our 12-month target price of $209, cut $29, reflects a 25x multiple on our ‘25 EPS
estimate, well below BA’s three-year historical forward average of 40x, but merited,
in our view, by what we see as rising regulatory risk. We widen our expected ‘23 loss
per share by $0.42 to -$5.75, trim our ‘24 EPS estimate by $0.50 to $3.60, and trim
‘25’s EPS view by $0.45 to $8.35. The WSJ has reported that the Boeing MAX-9 plug-
type door at the center of the recent controversy was likely re-installed by BA
without necessary bolts, and that there were lapses in process documentation.
Meanwhile, BA has now withdrawn a previously-requested safety exemption for the
yet-to-be-certified MAX-7. We believe this withdrawal reflects a “read the room”
moment by BA management in light of BA’s ongoing quality control problems. The
secular growth tailwind from an aging commercial aircraft fleet is still intact, but
BA’s near-term focus needs to be solely on quality control, which likely mutes
delivery cadence in ‘24. / Stewart Glickman, CFA
5
Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Analysts Recommendations Wall Street Consensus Opinion

Buy/Hold

Wall Street Consensus vs. Performance

For fiscal year 2024, analysts estimate that BA will earn

USD 0.93. For fiscal year 2025, analysts estimate that BA's
earnings per share will grow by 650.95% to USD 6.97.

No. of
Recommendations % of Total 1 Mo.Prior 3 Mos.Prior
Buy 16 52 17 16
Buy/Hold 3 10 3 5
Hold 10 32 9 8
Weak hold 0 0 0 0
Sell 0 0 0 0
No Opinion 2 6 2 2
Total 31 100 31 31

Wall Street Consensus Estimates

Fiscal Year Avg Est. High Est. Low Est. # of Est. Est. P/E
2025 6.97 9.76 4.30 21 26.32
2024 0.93 4.28 -2.01 23 197.62
2025 vs. 2024 p 651% p 128% p 314% q -9% q -87%

Q1'25 1.31 2.18 0.62 6 139.62

Q1'24 -1.26 0.33 -3.16 20 -145.00
Q1'25 vs. Q1'24 p 204% p 557% p 120% q -70% p 196%
Forecasts are not reliable indicator of future performance.
Note: A company's earnings outlook plays a major part in any investment decision. S&P Global Market Intelligence organizes the earnings estimates of over 2,300 Wall Street analysts, and
provides their consensus of earnings over the next two years, as well as how those earnings estimates have changed over time. Note that the information provided in relation to consensus
estimates is not intended to predict actual results and should not be taken as a reliable indicator of future performance.
Note: For all tables, graphs and charts in this report that do not cite any reference or source, the source is S&P Global Market Intelligence.

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Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Glossary

STARS Abbreviations Used in Equity Research Reports

Since January 1, 1987, CFRA Equity and Fund Research Services, and its CAGR - Compound Annual Growth Rate
predecessor S&P Capital IQ Equity Research has ranked a universe of U.S. CAPEX - Capital Expenditures
common stocks, ADRs (American Depositary Receipts), and ADSs (American CY - Calendar Year
Depositary Shares) based on a given equity's potential for future performance. DCF - Discounted Cash Flow
Similarly, we have ranked Asian and European equities since June 30, 2002. DDM - Dividend Discount Model
Under proprietary STARS (Stock Appreciation Ranking System), equity analysts EBIT - Earnings Before Interest and Taxes
rank equities according to their individual forecast of an equity's future total EBITDA - Earnings Before Interest, Taxes, Depreciation & Amortization
return potential versus the expected total return of a relevant benchmark (e.g., EPS - Earnings Per Share
a regional index (MSCI AC Asia Pacific Index, MSCI AC Europe Index or S&P 500® EV - Enterprise Value
Index)), based on a 12-month time horizon. STARS was designed to help FCF - Free Cash Flow
investors looking to put their investment decisions in perspective. Data used to FFO - Funds From Operations
assist in determining the STARS ranking may be the result of the analyst's own FY - Fiscal Year
models as well as internal proprietary models resulting from dynamic data P/E - Price/Earnings
inputs. P/NAV - Price to Net Asset Value
PEG Ratio - P/E-to-Growth Ratio
S&P Global Market Intelligence's Quality Ranking PV - Present Value
(also known as S&P Capital IQ Earnings & Dividend Rankings) - Growth and R&D - Research & Development
S&P Capital IQ Earnings & Dividend Rankings stability of earnings and dividends ROCE - Return on Capital Employed
are deemed key elements in establishing S&P Global Market Intelligence's ROE Return on Equity
earnings and dividend rankings for common stocks, which are designed to ROI - Return on Investment
capsulize the nature of this record in a single symbol. It should be noted, ROIC - Return on Invested Capital
however, that the process also takes into consideration certain adjustments ROA - Return on Assets
and modifications deemed desirable in establishing such rankings. The final SG&A - Selling, General & Administrative Expenses
score for each stock is measured against a scoring matrix determined by SOTP - Sum-of-The-Parts
analysis of the scores of a large and representative sample of stocks. The range WACC - Weighted Average Cost of Capital
of scores in the array of this sample has been aligned with the following ladder
of rankings: Dividends on American Depository Receipts (ADRs) and American Depository
Shares (ADSs) are net of taxes (paid in the country of origin).
A+ Highest B Below Average
Qualitative Risk Assessment
A High B- Lower
A Above C Lowest
Reflects an equity analyst's view of a given company's operational risk, or the
risk of a firm's ability to continue as an ongoing concern. The Qualitative Risk
B+ Average D In Reorganization
Assessment is a relative ranking to the U.S. STARS universe, and should be
NC Not Ranked reflective of risk factors related to a company's operations, as opposed to risk
and volatility measures associated with share prices. For an ETF this reflects on
EPS Estimates a capitalization-weighted basis, the average qualitative risk assessment
CFRA's earnings per share (EPS) estimates reflect analyst projections of future assigned to holdings of the fund.
EPS from continuing operations, and generally exclude various items that are
viewed as special, non-recurring, or extraordinary. Also, EPS estimates reflect STARS Ranking system and definition:
either forecasts of equity analysts; or, the consensus (average) EPS estimate, ««««« 5-STARS (Strong Buy):
which are independently compiled by S&P Global Market Intelligence, a data Total return is expected to outperform the total return of a relevant benchmark,
provider to CFRA. Among the items typically excluded from EPS estimates are by a notable margin over the coming 12 months, with shares rising in price on
asset sale gains; impairment, restructuring or merger-related charges; legal an absolute basis.
and insurance settlements; in process research and development expenses; ««««« 4-STARS (Buy):
gains or losses on the extinguishment of debt; the cumulative effect of Total return is expected to outperform the total return of a relevant benchmark
accounting changes; and earnings related to operations that have been over the coming 12 months.
classified by the company as discontinued. The inclusion of some items, such
as stock option expense and recurring types of other charges, may vary, and ««««« 3-STARS (Hold):
depend on such factors as industry practice, analyst judgment, and the extent Total return is expected to closely approximate the total return of a relevant
to which some types of data is disclosed by companies. benchmark over the coming 12 months.
««««« 2-STARS (Sell):
12-Month Target Price Total return is expected to underperform the total return of a relevant
The equity analyst's projection of the market price a given security will benchmark over the coming 12 months.
command 12 months hence, based on a combination of intrinsic, relative, and
««««« 1-STAR (Strong Sell):
private market valuation metrics.
Total return is expected to underperform the total return of a relevant
benchmark by a notable margin over the coming 12 months, with shares falling
in price on an absolute basis.
Relevant benchmarks:
In North America, the relevant benchmark is the S&P 500 Index, in Europe and
in Asia, the relevant benchmarks are the MSCI AC Europe Index and the MSCI AC
Asia Pacific Index, respectively.

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Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
Disclosures

Stocks are ranked in accordance with the following ranking methodologies:
STARS Stock Reports:
Qualitative STARS rankings are determined and assigned by equity analysts. For reports
containing STARS rankings refer to the Glossary section of the report for detailed
methodology and the definition of STARS rankings.
Quantitative Stock Reports:
Quantitative rankings are determined by ranking a universe of common stocks based on 5
measures or model categories: Valuation, Quality, Growth, Street Sentiment, and Price
Momentum. In the U.S., a sixth sub-category for Financial Health will also be displayed.
Percentile scores are used to compare each company to all other companies in the same
universe for each model category. The five (six) model category scores are then weighted
and rolled up into a single percentile ranking for that company. For reports containing
quantitative rankings refer to the Glossary section seof the report for detailed methodology
and the definition of Quantitative rankings.
STARS Stock Reports and Quantitative Stock Reports:
The methodologies used in STARS Stock Reports and Quantitative Stock Reports
(collectively, the "Research Reports") reflect different criteria, assumptions and analytical
methods and may have differing rankings. The methodologies and data used to generate
the different types of Research Reports are believed by the author and distributor
reasonable and appropriate. Generally, CFRA does not generate reports with different
ranking methodologies for the same issuer. However, in the event that different
methodologies or data are used on the analysis of an issuer, the methodologies may lead
to different views on the issuer, which may at times result in contradicting assessments of
an issuer. CFRA reserves the right to alter, replace or vary models, methodologies or
assumptions from time to time and without notice to clients.
STARS Stock Reports:
Global STARS Distribution as of March 31, 2024
Ranking North America Europe Asia Global
Buy 37.6% 34.7% 44.1% 38.5%
Hold 52.6% 52.5% 50.6% 52.1%
Sell 9.7% 12.8% 5.4% 9.4%
Total 100.0% 100.0% 100.0% 100.0%
Analyst Certification:
STARS Stock Reports are prepared by the equity research analysts of CFRA and its
affiliates and subsidiaries. Quantitative Stock Reports are prepared by CFRA. All of the
views expressed in STARS Stock Reports accurately reflect the research analyst's
personal views regarding any and all of the subject securities or issuers; all of the views
expressed in the Quantitative Stock Reports accurately reflect the output of CFRA's
algorithms and programs. Analysts generally update STARS Stock Reports at least four
times each year. Quantitative Stock Reports are generally updated weekly. No part of
analysts’ or CFRA’s compensation was, is, or will be directly or indirectly related to the
specific rankings or views expressed in any Stock Report.
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Stock Report | April 06, 2024 | NYSESymbol: BA | BA is in the S&P 500
The Boeing Company
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