In this article I will analyze Boeing Stock form investment point of view, and see if there is an opportunity to invest in this company or not.
First, let see what is the main business that Boeing is doing. Boeing is global aerospace company, develops, manufactures and services commercial airplanes, defense products and space systems for customers in more than 150 countries. That means the company is a legacy in aerospace market which is divided between Boing and Airbus.
The future market value for aerospace is $7.2 trillion in 2040 from $3.6 trillion in 2019. That means in 20 years the sales for airplanes will be doubled, that also imply that in 20 years the industry growth rate is 100% which is good for the business.
Secondly, when we examine Boeing EPS for the last 10 years. From year 2020 until now 2022, Boeing EPS was in a negative territory and that was obvious because the COVID-19 pandemic hit the airline industry very hard which lead to that result. Also, when examine the Free cash flow that company generated for the last ten years, it appears that from year 2020 until now the company could not generate any positive cash flow which obvious since the operating income is negative. Bottom line, COVID-19 crisis hit Boeing and airlines industry badly that resulted in negative result and make those companies that operate in this industry unable to generate a positive profit margin, which lead to all the above discussed negative result. Also by examine the equity value of Boeing, it was in negative territory since year 2020, the table below will show all the negative data Boeing had since 2020:
| 2020 | 2021 | TTM | |
| Profit Margin | -12,978,000 | -3,389,000 | -7,349,000 |
| Income Margin | -14,476,000 | -5,033,000 | -9,073,000 |
| EBIT | -12,320,000 | -2,351,000 | -6,511,000 |
| EPS | -20.88 | -7.15 | – |
| Free Cash Flow | -19,713,000 | -4,396,000 | -347,000 |
| Equity | -8,300,000 | -18,075,000 | -14,846,000 |
The company stock price in the time of COVID-19 crisis reached to its lowest price since 2007 which was 88.8$ and bounce back until its now traded in 179.5$ as shown below:
But why Boeing company did not fill to bankruptcy especially if it failed to generate any cash for the investors in (3) years, additionally, why those investors did not escape this company and look for other better investment opportunity.
I believe Boeing is Trademark company for U.S government and nothing will lead to its bankruptcy and whenever its has negative situation the government will bailout the company, as when president Trump over to help the company in 2020 when Boeing suggests at least $60 billion to help aerospace manufacturing industry.
Boeing need sometimes form 3 to 5 years to prove that its capable again for generating some cash for its investors and it survived the hit that caused by COVID-19 crisis, and I believe that for time been Boeing is not a good choice for any investors who want to risk her money in order to generate cash in the future which is at least five years from now.
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