Stock Analysis

Boeing's (NYSE:BA) Turbulence is Now 3 Years and Counting

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The Boeing Company ( NYSE: BA ) has been under perpetual pressure for the last few years between external and internal problems.

The company lost billions due to the 2020 pandemic and its various production issues. At this point, the positive catalysts look few and far between.

See our latest analysis for Boeing .

Q4 Earnings Results

  • Non-GAAP EPS: - US$ 7.69 (miss by US$7.50)
  • Revenue: US$14.79b (miss by US$1.87b)
  • Revenue growth: -3.3% Y/Y
  • Total backlog: US$377b
  • Net order increase: 535

Manufacturing flaws in 787 Dreamliner jets attributed to increasing in costs of US$5.5b, as the company has had to inspect all of them, incurring penalties to airlines for the delays. Dreamliner deliveries are still on pause. Overall, the company narrowed full-year losses to US$4.3b from US$11.9b in 2020.

While the company was surprised with the first recorded positive cash flow since 2019 (US$494m), those results were overshadowed by the 787 costs.

NYSE: BA, Free Cash Flow Per Quarter, Source: Bloomberg

However, it is necessary to point out that 787 deferred accounts also went down by US$3.5b in Q4, while they go down by a much smaller amount in average years. Yet, we have an opposite situation as there were no 787 deliveries at all!

What Is Boeing's Net Debt?

The chart below, which you can click on for greater detail, shows that Boeing had US$62.2b in debt, about the same as the year before.However, because it had a cash reserve of US$20.0b, its net debt is less, at about US$42.2b.

NYSE: BA Debt to Equity History January 27th, 2022

How Healthy Is Boeing's Balance Sheet?

We can see from the most recent balance sheet that Boeing had liabilities of US$85.8b falling due within a year and liabilities of US$75.3b due beyond that.Offsetting these obligations, it had cash of US$20.0b as well as receivables valued at US$12.3b due within 12 months.So its liabilities outweigh the sum of its cash and (near-term) receivables by US$128.9b.

Given this deficit is higher than the company's market capitalization of US$114.2b, we think shareholders really should watch Boeing's debt levels. Hypothetically, heavy dilution would be required if the company was forced to pay down its liabilities by raising capital at the current share price.

There's no doubt that we learn most about debt from the balance sheet.But ultimately, the future profitability of the business will decide if Boeing can strengthen its balance sheet over time. So if you're focused on the future, you can check out this free report showing analyst profit forecasts .

In the last year, Boeing wasn't profitable at an EBIT level but managed to grow its revenue by 3.3%, to US$63b. While things seem to be slowly improving, Boeing's turnaround is a bit slow for our taste.

Caveat Emptor

Importantly, Boeing had earnings before interest and tax (EBIT) loss over the last year.Indeed, it lost US$3.5b at the EBIT level.When we look at that alongside the significant liabilities, we're not particularly confident about the company.We'd want to see some solid near-term improvements before getting too interested in the stock, not least because it had a negative free cash flow of US$9.2b over the last twelve months.

Finally, while the company posted its first positive free cash flow result since 2019, we're on alert for possible accounting gimmicks due to unusual items.

The balance sheet is the prominent place to start when analyzing debt levels.However, not all investment risk resides within the balance sheet - far from it. Be aware that Boeing is showing 3 warning signs in our investment analysis , and 1 of those is potentially serious...

When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free , right now.

What are the risks and opportunities for Boeing?

The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.

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  • Trading at 41.6% below our estimate of its fair value

  • Earnings are forecast to grow 57.79% per year


  • Interest payments are not well covered by earnings

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Simply Wall St analyst Stjepan Kalinic and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Stjepan Kalinic

Stjepan Kalinic

Stjepan is a writer and an analyst covering equity markets. As a former multi-asset analyst, he prefers to look beyond the surface and uncover ideas that might not be on retail investors' radar. You can find his research all over the internet, including Simply Wall St News, Yahoo Finance, Benzinga, Vincent, and Barron's.



The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sells, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.

High growth potential and fair value.