Boeing Stock Analysis: Sales Increase 8% to $24.6 Billion. Time to Buy?

Parkev states that Boeing recently reported $24.6 billion in revenue, an 8% year-over-year increase, but emphasizes that the company is currently defined by its staggering $715 billion backlog of over 6,200 airplanes. Parkev argues that the primary challenge for Boeing is execution, as customers are waiting years for deliveries while the company struggles with production deficiencies, regulatory hurdles, and safety issues. Parkev notes that Boeing is attempting to ramp up 737 production to 52 planes per month, but progress has been hampered by labor difficulties and inflation eating into profit margins on fixed-price contracts.

Parkev highlights that Boeing's profitability has been negative since the pandemic, though free cash flow has recently turned positive. While management aims for $10 billion in annual free cash flow by the end of the decade, Parkev remains cautious due to the slow pace of improvement. Parkev mentions that an updated intrinsic value calculation places Boeing's fair value at $202 per share, which is slightly lower than the recent market price of $211. Consequently, Parkev has downgraded the stock from a buy to a hold, expecting it to perform in line with the broader market.