Measuring The Boeing Company’s (NYSE:BA) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BA’s recent performance announced on 31 December 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Boeing
How Did BA’s Recent Performance Stack Up Against Its Past?
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to examine different companies in a uniform manner using new information. For Boeing, its latest earnings (trailing twelve month) is US$8.19B, which, relative to the prior year’s level, has risen by a substantial 67.44%. Since these figures are somewhat nearsighted, I have created an annualized five-year figure for BA’s net income, which stands at US$4.85B This shows that, generally, Boeing has been able to consistently grow its net income over the past few years as well.What’s enabled this growth? Let’s take a look at if it is solely attributable to industry tailwinds, or if Boeing has seen some company-specific growth. In the last few years, Boeing increased its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the US aerospace & defense industry has been growing, albeit, at a muted single-digit rate of 3.06% in the prior twelve months, and 4.84% over the past five years. This means any recent headwind the industry is enduring, Boeing is relatively better-cushioned than its peers.
What does this mean?
Though Boeing’s past data is helpful, it is only one aspect of my investment thesis. While Boeing has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Boeing to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for BA’s future growth? Take a look at our free research report of analyst consensus for BA’s outlook.
- 2. Financial Health: Is BA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- 3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.