Boeing Delivers Next-Generation Satellite: What Awaits Investors?

Core Insights - Boeing has delivered the 9th and 10th O3b mPOWER satellites to SES, enhancing its position in the global space-based connectivity industry with software-defined payloads that dynamically allocate power [1][10] - The company is preparing for the launch of these satellites and is producing three additional satellites for SES, indicating strong growth potential in space technology [2][10] Boeing's YTD Performance - Boeing's shares have increased by 22% year-to-date, outperforming the S&P 500's return of 6.3%, but slightly underperforming the Zacks aerospace-defense industry's growth of 22.2% and the broader Zacks Aerospace sector's growth of 23.1% [4] - Other aerospace companies like Embraer and Airbus have seen significant stock gains, with Embraer up 66.4% and Airbus up 30.2% [5] Growth Opportunities - Boeing is positioned to benefit from rising global air travel and an aging aircraft fleet, leading to strong demand for new jets and aftermarket services, with a backlog of $22.04 billion in its Global Services segment as of March 31, 2025 [6][10] - The company forecasts a $4.4 trillion market opportunity in commercial aviation services from 2024 to 2043, supporting long-term growth in its Global Services unit [7][10] - In defense, Boeing is well-positioned to take advantage of increasing U.S. military spending, with a proposed 13% increase in defense spending for FY2026 to $1.01 trillion [8] Earnings Estimates - The Zacks Consensus Estimate projects Boeing's long-term earnings growth rate at 18.1%, surpassing the industry average of 11.8% [11] - For the second quarter of 2025, sales are expected to improve by 17.4% year-over-year, with full-year 2025 sales anticipated to rise by 25.6% [12] - However, most near-term earnings estimates have seen downward revisions, indicating a potential loss of investor confidence [13] Financial Metrics - The current Zacks Consensus Estimate for second-quarter 2025 sales is $19.79 billion, with a year-over-year growth estimate of 17.35% [14] - The earnings per share (EPS) estimates for the current year show a significant year-over-year growth estimate of 91.17% [15] Valuation - Boeing's forward 12-month price-to-sales (P/S) ratio is 1.80X, slightly below the peer group's average of 1.83X, suggesting a lower price relative to expected sales growth [19] - The stock's forward P/S ratio appears stretched compared to its five-year median value of 1.41 [19]