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My Unpopular Thoughts on Boeing…

Posted April 28, 2025

Davis Wilson

By Davis Wilson

My Unpopular Thoughts on Boeing…

Is it finally time to buy Boeing?

This morning, Boeing (BA) shares are gaining altitude again after a Wall Street upgrade and better-than-expected first-quarter results.

On the surface, Boeing’s turnaround looks real.

The company posted an adjusted operating profit of $199 million in Q1 – well ahead of Wall Street’s $122 million estimate, and a sharp reversal from the $388 million loss a year ago.

Improvements were not just in commercial aircraft, but also across its defense and services businesses.

Wall Street is warming up too: 61% of Wall Street analysts now rate Boeing a Buy, compared to the S&P 500 average of about 55%, according to FactSet.

The average analyst price target sits around $196 – about 9% higher than today’s levels.

Yet despite the optimism, Boeing still faces major challenges.

  • Deliveries to Chinese airlines have been paused again amid U.S.–China trade tensions.
  • Quality control issues – exposed by the 737 MAX disasters and subsequent inspections – continue to haunt production.
  • Boeing also carries a much heavier debt load after borrowing heavily during the pandemic.

In Q1 2018, before these crises, Boeing earned $2.5 billion in a single quarter.

The newly announced $199 million figure, while encouraging, is only a fraction of Boeing’s former profitability.

Valuation: A Mixed Picture

At $180 per share, Boeing’s valuation blends cautious optimism with notable risks. Here’s a detailed look at the key metrics:

  • Backlog: Boeing’s order backlog stands at a robust $545 billion, covering 11 years of production at current rates.
    This includes 5,600 commercial aircraft and significant defense contracts, providing long-term revenue visibility and a buffer against short-term disruptions like the paused Chinese deliveries, which may cost $1-2 billion in 2025 revenue.
  • Price-to-Earnings (P/E) Ratio: Boeing’s current P/E is “N/A” due to negative earnings. Analysts project a 2025 EPS of -$1.86 due to production and tariff costs, but a recovery to $4.20 by 2026 as 737 production ramps up.
    At $180, this implies a forward P/E of 43x for 2026 – steep compared to Airbus (18x forward P/E) and Lockheed Martin (16x), signaling even at these levels, BA stock isn’t cheap.
  • Debt Load: Boeing’s debt load is a hefty $54 billion, accumulated during the pandemic to offset $20 billion in 737 MAX grounding costs and a travel slump.
    This debt, combined with rising interest rates, increases financial risk, with annual interest expenses estimated at $2.5 billion – eating into profitability and making deleveraging a priority for management.

Is Boeing a Buy at $180?

Boeing’s valuation at $180 is a high-risk, high-reward proposition.

The $545 billion backlog and defense segment growth are strong tailwinds, but the 43x forward P/E and $54 billion debt load signal caution.

Boeing looks like the classic "beaten down" stock ready for a rebound – and to some extent, it may be.

Improving earnings, a massive order backlog, and positive analyst sentiment are legitimate bright spots.

But when you dig deeper, Boeing isn't exactly cheap.

Meanwhile, there are plenty of cheaper, stronger opportunities available today — stocks with healthier balance sheets, faster growth, and better valuations.

I talk about them all the time in The Million Mission – think Nvidia, Meta Platforms, and Uber Technologies.

So if you’re looking for a turnaround play with a lot of baggage, Boeing might deserve a spot on your watchlist.

But if you’re serious about building wealth with the best risk/reward setups, there are far better options in this market right now.

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