This website uses cookies to provide you with the best user experience. By continuing to browse the site you are agreeing to our use of cookies Learn More.

Boeing’s rebound and future financial projections

Boeing images large

The company was founded in July 1916 by the American aviation pioneer William Boeing. It debuted as an airplane factory, under the name Pacific Aero Products Co.; and became Boeing on 1st August, 1997 – as a result of its merger with the major aerospace manufacturing corporation McDonnell Douglas.

Boeing is now among the world’s largest global aircraft manufacturers and operates through its subsidiaries, which include the following brands: Boeing Defence UK, Boeing Aircraft Holding, and Boeing Canada. With a worldwide coverage, the aerospace giant has five business sectors: Boeing Commercial Airplanes (BCA); Boeing Defense, Space & Security (BDS); Engineering, Operations & Technology; Boeing Shared Services Group, and Boeing Capital. Some of the most prominent products from its portfolio are the Boeing 737, 747, 767, 777, and 787 jet airliners; the CH-47 Chinook twin-engine helicopter; the Boeing 702 family of communication satellite bus, the McDonnell Douglas F-15 Eagle; and last but not least – the Boeing F/A-18E and F/A-18F Super Hornet.

Boeing’s corporate headquarters are located in Chicago, Illinois; and it is led by the American businessman Dennis Muilenburg, who has been the Chairman, President, and CEO of the company since 2015.

Boeing on the Stock Market

Boeing (NYSE: BA) is publicly-listed and traded on the New York Stock Exchange, and is included in the Dow Jones Industrial Average (DIJA), as well as in the S&P 100 and S&P 500 Components. With more than $3 billion invested in research and development each year, according to their statement as projected on their official website1; the company has always managed to contribute to the aerospace & defense sectors with spearheading and innovative designs and products, like the 787 Dreamliner airplane. Moreover, in 2014, NASA paid Boeing $4.2 billion for its CST-100 Starliner capsule2, under the Commercial Crew Program. SpaceX’s Crew Dragon was also included in the contract, with a $2.6 billion deal. The entire goal of the on-going mission is to replace the costly Russian Soyuz rockets and spacecraft with the two capsules, to facilitate the travels of NASA’s astronauts to and from the ISS. These futuristic and innovative plans and operations in which Boeing kept engaging made it an attractive stock for investors over the years, but it also helped it expand.

The company used the profits3 from record jet sales in 2017 as projected on their official website to transition into additional business segments and announced its intentions to close a deal with the international high-technology group Safran (EPA: SAF), for the two companies to jointly design, build and service Auxiliary Power Units (APUs).

In November 2018, they received regulatory approvals for a joint venture. Shifting to the defense sector, which represents about 22% of Boeing’s annual sales4, 2018 has been a good year for the firm, under the supportive Trump administration.

According to The Street5, following a solid international demand, Boeing registered $12 billion in new orders in the first quarter of 2018, which made the operating profits of the segment to go up 13% and 18%, respectively, from the previous year. Overall, according to the official data published by the company6 – 2018 ended with record revenue of $101.1 billion, record GAAP EPS of $17.85 and record core EPS (non-GAAP) of $16.01, as well as a record operating cash flow of $15.3 billion. Boeing’s year on year earnings growth rate7 has been positive in the past five years, and in 2017 has spiked up to 31.8%, surpassing the 5-year average of 13.2%.

The aftermath of the Ethiopian Airlines plane crash

On 10th March 2019, a Boeing 737 Max 8 jetliner crashed shortly after leaving Ethiopia’s capital, killing all people on board. The same model crashed five months earlier in Indonesia, leaving no survivors. The two planes collapsed in identical ways, faltering minutes after takeoff and plunging into a deadly descent.

Amid growing scrutiny surrounding the similar circumstances of the two tragedies, a number of countries grounded the 737 Max 8 jetliners, including the United States. According to CNN8, Boeing’s shares fell 3% right after President Donald Trump made the announcement. Even though it rebounded and ended higher (377.14), the stock is still down more than 10% since the crash, “wiping more than $25 billion off the company’s market value”. At the time of writing (03/19/2019), Boeing opened at 371.14, hit a high of 378.77 and closed at 373.43 .

What happens next?

Although the Boeing shares fell significantly in response to the tragedy and the stock was volatile, it rebounded by the end of the day. , According to Investing.com experts appear to be positive that Boeing will continue to see significant revenue growth from its innovation within aviation industry going forward and in a few months the turmoil will diminish.

If you’re looking to invest in a stock but you’re not sure just yet if it should be Boeing (NYSE: BA), at TradeFW we offer you the possibility to choose from a plethora of other companies, from several industries. Check out our portfolio and pick your favorite stock!

References:

  1. Boeing.com, http://www.boeing.com/innovation/#/overview
  2. Mike Wall , “Boeing Preps for Upcoming Starliner Test Flight to Space Station”, Mar, 2019, space.com, https://www.space.com/boeing-starliner-flight-launch-test-prep.html
  3. Boeing.com, “Boeing Reports Record 2017 Results and Provides 2018 Guidance”, Jan, 2018, http://investors.boeing.com/investors/investor-news/press-release-details/2018/Boeing-Reports-Record-2017-Results-and-Provides-2018-Guidance/default.aspx
  4. Prnewswire.com, “Boeing Reports Record 2018 Results and Provides 2019 Guidance”, Jan, 2019, https://www./news-releases/boeing-reports-record-2018-results-and-provides-2019-guidance-300786413.html
  5. Brian Sozzi, “3 Reasons Airplane Giant Boeing Has Amassed Billions In Market Value Since May”, Jun, 2018, thestreet.com, https://www.thestreet.com/investing/stocks/3-reasons-boeing-has-amassed-billions-in-market-value-since-may-14613750
  6. Boeing.com, “”, http://investors.boeing.com/investors/investor-news/press-release-details/2019/Boeing-Reports-Record-2018-Results-and-Provides-2019-Guidance/default.aspx
  7. Macrotrends.net, “Boeing Revenue 2006-2018 | BA”, https://www.macrotrends.net/stocks/charts/BA/boeing/revenue
  8. Chris Isidore, “The 737 Max crisis has wiped more than $25 billion off Boeing’s market value”, Mar, 2019, cnn.com, https://edition.cnn.com/2019/03/13/investing/boeing-stock-737-max-grounding/index.html

Welcome Trader,
No current updates.