Boeing Gains 11% in a Year: Is This the Right Time to Buy the Stock?

Core Viewpoint - Boeing's stock has increased by 10.8% over the past year, but it has underperformed compared to the S&P 500 and the broader aerospace sector [1][9]. Group 1: Stock Performance - Boeing's stock performance is lagging behind other aerospace companies, such as Embraer and Airbus, which have seen significant gains of 59.5% and 10.5%, respectively [2]. - The stock's performance is also below the Zacks aerospace-defense industry's rise of 21.7% and the broader Zacks Aerospace sector's growth of 21.3% [1]. Group 2: Financial Performance - Boeing's revenues from the commercial aerospace segment surged 75% year over year to $8.15 billion in Q1 2025, driven by higher jet deliveries [4]. - The defense unit secured contracts worth $4 billion in Q1 2025, resulting in a backlog of $61.57 billion as of March 31, 2025, indicating strong demand in the defense market [4]. - Cash and cash equivalents totaled $23.67 billion at the end of Q1 2025, with long-term debt at $45.69 billion and current debt at $7.93 billion, reflecting a strong solvency position [5]. Group 3: Market Opportunities - Rising air travel and an aging global fleet are driving demand for new jets and aftermarket services, with Boeing forecasting a $4.4 trillion market opportunity for commercial aviation support and services from 2024 to 2043 [6]. - Boeing's Global Services unit has a backlog of $22.04 billion as of March 31, 2025, positioning it well for long-term growth [6]. Group 4: Earnings Estimates - Boeing's second-quarter 2025 sales are estimated to improve by 18.1% year over year, while full-year 2025 sales are projected to increase by 25.6% [12]. - The Zacks Consensus Estimate for Boeing's long-term earnings growth rate is pegged at 18.1%, higher than the industry's 11.8% [11]. Group 5: Challenges - Boeing faces supply-chain issues and a weak return on invested capital (ROIC), which is currently negative and lags behind peers like Embraer and Airbus [18][19]. - The stock is trading at a forward price-to-sales (P/S) ratio of 1.78, which is a premium compared to the peer group's average of 1.75 [20][22].