Group 1 - CEO Kelly Ortberg is making significant improvements at Boeing, although not to the extent of GE Aerospace's CEO Larry Culp [1] - Boeing's board has been strengthened with industrial leaders, including Carrier Global CEO David Gitlin and former GE Aviation CEO David Joyce, which reflects positively on the decision to hire Ortberg [2] - Since Ortberg's appointment in August 2024, Boeing has increased its 737 MAX production rate to 38 per month and plans to seek FAA approval to raise it to 42 per month [3] Group 2 - The defense segment, Boeing Defense, Space & Security (BDS), has shown notable recovery under Ortberg's leadership, with the replacement of BDS CEO Ted Colbert by Steve Parker [4] - BDS has reported profitability again after a period of losses, indicating improved cost management and execution [6] - BDS has maintained its estimated-at-completion cost forecasts for two consecutive quarters, which is significant for the business's financial health [6]

Group 1 - Boeing stock has risen 4% since the last report, outperforming the S&P 500 [1] - The company is showing signs of operational recovery, particularly in the 737 MAX and 787 programs [1] Group 2 - The Aerospace Forum aims to identify investment opportunities in the aerospace, defense, and airline industry [2] - The analysis provided is informed by data and aims to contextualize developments affecting investment theses [2]

Core Insights - Global travel and defense budgets are increasing, leading to heightened investor interest in aerospace stocks, particularly Boeing and RTX, which benefit from overlapping growth drivers [1][2][3] Financial Performance - Boeing's commercial revenues surged by 75% year-over-year in Q1 2025 due to rising global air traffic, while RTX achieved 8% organic sales growth driven by aftermarket services [9][10] - As of Q1 2025, Boeing reported $23.67 billion in cash and equivalents against $7.93 billion in current debt, indicating strong near-term solvency [5] - RTX has $5.16 billion in cash and equivalents, with $3.06 billion in current debt and $38.24 billion in long-term debt, maintaining solid short-term liquidity [6] Growth Catalysts - Both companies are positioned to benefit from a proposed 13% increase in U.S. defense spending to $1.01 trillion for FY26, with significant allocations for aerospace projects [7][8] - The International Air Transport Association projects a 5.8% year-over-year growth in passenger traffic for 2025, which will further support both companies' commercial aviation segments [9] Stock Performance - Over the past three months, Boeing's stock has increased by 33%, outperforming RTX's 26% increase, but RTX has outperformed Boeing over the past year with a 44.3% increase compared to Boeing's 22.9% [18][22] - Boeing trades at a more attractive forward sales multiple of 1.89 compared to RTX's 2.33 [18] Investment Outlook - Boeing presents a more compelling risk-reward opportunity in 2025, showing signs of recovery despite ongoing challenges, while RTX offers operational consistency and diversification [22][23]

Core Insights - Boeing delivered 60 aircraft in June, including 42 units of the 737 MAX [1] Company Summary - The total number of aircraft delivered by Boeing in June was 60 [1] - Out of the total deliveries, 42 were specifically 737 MAX models [1]

Group 1 - Boeing forecasts a 40% increase in global air travel demand by 2030, requiring thousands of new jet aircraft in the coming years [1][3] - The company predicts a total demand for 43,600 new aircraft by 2044, which is consistent with last year's forecast of 43,975 aircraft by 2043 [1] - Boeing's delivery forecast includes approximately 33,300 single-aisle jets, over 7,800 wide-body jets, 955 factory-built freighters, and 1,545 regional jets [1] Group 2 - Boeing has adjusted its 20-year passenger traffic growth forecast from 4.7% to 4.2%, and has also lowered global economic growth expectations from 2.6% to 2.3% [1] - The company expects that trade fluctuations will not significantly alter long-term demand despite a reduction in freight volume growth from 4.1% to 3.7% [1] - Boeing anticipates that about 51% of new aircraft demand over the next 20 years will come from growth rather than replacing old aircraft [4] Group 3 - The Asia-Pacific region, particularly China and South Asia, is expected to account for half of the new capacity, while North America and Eurasia will represent over half of the expected deliveries for replacing old aircraft [4] - Boeing currently has 10% of its existing backlog orders from China, which has paused accepting new Boeing aircraft due to tariff conflicts with the U.S. [4]

Group 1: Demand Forecast - Boeing expects global demand for air travel to increase by more than 40% by 2030, leading to a need for 43,600 new airliners through 2044, which is similar to last year's forecast of 43,975 new deliveries through 2043 [1][4] - Airbus has revised its 20-year demand forecast up by 2% to 43,420 jets, indicating resilience in the air transport industry despite current trade tensions [2] Group 2: Delivery Projections - Boeing's delivery projection includes approximately 33,300 single-aisle airliners, over 7,800 widebody jets, 955 factory-built freighters, and 1,545 regional jets, with single-aisle jets making up about 80% of current deliveries [3] - Boeing anticipates that 51% of demand for new aircraft over the next 20 years will stem from growth rather than replacing older airplanes, with China and South/Southeast Asia expected to account for half of this additional capacity [10] Group 3: Economic and Traffic Growth Adjustments - Boeing has reduced its 20-year forecast for passenger traffic growth from 4.7% to 4.2%, global economic growth from 2.6% to 2.3%, cargo traffic growth from 4.1% to 3.7%, and fleet growth from 3.2% to 3.1% [4] Group 4: Production Challenges - Airplane production is currently at half or less of pre-pandemic levels, resulting in a shortage of 1,500 to 2,000 airliners [6][12] - Both Boeing and Airbus are facing challenges in returning aircraft production to pre-pandemic levels, with Boeing dealing with production safety concerns that have led to a cap on 737 production [7] Group 5: Recent Incidents - Boeing has improved production quality recently, but the crash of an Air India Boeing 787-8 Dreamliner has put the company back in crisis mode, affecting leadership plans and operations [9]

Core Viewpoint - Boeing's stock is currently viewed as unattractive due to poor operational performance and financial health, despite a seemingly reasonable valuation of approximately $205 [3][13]. Financial Performance - Boeing's revenues have declined by 9.2% from $76 billion to $69 billion in the past 12 months, contrasting with a 5.5% growth for the S&P 500 [11] - The company's operating income over the last four quarters was -$10 billion, resulting in an operating margin of -14.7%, compared to 13.2% for the S&P 500 [11] - Boeing's net income for the last four quarters was -$12 billion, leading to a net income margin of -16.6%, while the S&P 500 had a margin of 11.6% [11] Valuation Metrics - Boeing has a price-to-sales (P/S) ratio of 2.3, which is lower than the S&P 500's ratio of 3.0 [5]. - The stock has fallen 57.0% from a high of $269.19 on March 12, 2021, to $115.86 on June 13, 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500 [12]. Growth and Profitability - Boeing's top line has increased at an average rate of 4.9% over the last three years, compared to a 5.5% rise for the S&P 500 [11]. - Boeing's profit margins are significantly lower than most companies in the Trefis coverage universe, indicating extremely weak profitability [7][15]. Financial Stability - Boeing's total debt was $54 billion at the end of the most recent quarter, with a market capitalization of $154 billion, resulting in a high debt-to-equity ratio of 32.9% compared to 19.9% for the S&P 500 [11]. - Cash and cash equivalents account for $24 billion of Boeing's total assets of $156 billion, leading to a moderate cash-to-assets ratio of 15.1% [11]. Downturn Resilience - Boeing's stock has performed significantly worse than the S&P 500 during recent downturns, indicating extremely weak resilience [9][15]. - The stock has not yet recovered to its pre-crisis peak, highlighting ongoing challenges [12].

Core Viewpoint - Boeing Co. is facing significant challenges following a recent crash of a Dreamliner 787-8, which has shaken investor confidence and raised safety concerns that the company had previously managed to mitigate [1][3]. Group 1: Recent Performance and Developments - Boeing's stock had recently reached a 15-month high, with shares rising over 13% year-to-date, driven by a recovery in aerospace, defense contracts, and increased production of the 737 MAX [1][2]. - The company resumed 737 MAX deliveries to China and secured a $96 billion deal with Qatar Airways, contributing to positive market sentiment [2]. Group 2: Impact of the Crash - The crash of the Dreamliner poses a threat to Boeing's fragile recovery, with the cause still under investigation [3]. - The Federal Aviation Administration (FAA) is maintaining strict oversight, capping monthly 737 MAX output at 38 units and inspecting every jet before delivery, which could be exacerbated by new safety concerns [4]. Group 3: Ongoing Risks - Structural risks remain, including tariff uncertainties, materials inflation, and a recovering aerospace supply chain, which could impact Boeing's operations [5]. - Despite a significant order backlog, the market's reaction to the crash indicates the volatility inherent in Boeing's recovery narrative [6].

Core Points - Boeing's shares fell 5% following a fatal crash of an Air India 787-8 Dreamliner, marking a significant setback for the company as it seeks to rebuild trust after previous safety and production issues [1][3][9] - The crash resulted in the death of all 242 individuals on board, making it the worst aviation disaster in a decade [1][5] - The incident negatively impacts the safety record of the Dreamliner, complicating CEO Kelly Orthberg's efforts to increase production amidst a backdrop of new orders and production targets achieved in May [3][7] Company Impact - Boeing is currently facing scrutiny over its aircraft safety, particularly with the Dreamliner, which had not experienced a fatal crash prior to this incident [3][4] - The company has a history of challenges with its 737 MAX jets, which were grounded for years due to two fatal crashes, and recent quality control concerns have resurfaced following a mid-flight incident with a 737 MAX 9 [4][10] - Shares of key suppliers, including Spirit AeroSystems and GE Aerospace, also experienced a decline of approximately 3% following the crash [7][8] Industry Context - The crash raises renewed fears regarding Boeing's aircraft safety, reflecting ongoing concerns that have plagued the company in recent years [9] - The incident may affect the broader aviation industry, particularly as it comes ahead of significant events like the Paris airshow, where Boeing had been looking to showcase its recovery and new orders [3]

Core Viewpoint - Boeing reported a total of 303 aircraft orders in May, indicating strong demand across its product lines [1] Summary by Category Total Orders - The total number of orders for Boeing in May was 303 aircraft [1] Specific Aircraft Orders - Among the total orders, there were 127 orders for the 787 series [1] - Boeing received 30 orders for the 777X model [1] - The 737 MAX model accounted for 146 orders [1]