Boeing Stock Fairly Valued at $249 per Share with Wide Moat Rating

Boeing's Q2 earnings report showed progress towards its goals, with 104 737 MAX and 24 787 jets delivered. Defense recorded a small operating profit, and services contributed $1 billion in operating profit. Morningstar has trued up its 2025 forecasts and revised its fair value estimate from $242 to $249 per share. The shares trade about 8% below the updated fair value estimate. Boeing's stock is fairly valued compared to its long-term fair value estimate.

Boeing (BA) reported its second-quarter (Q2) earnings, showing progress towards its goals despite ongoing challenges. The aerospace giant delivered 104 737 MAX and 24 787 jets, contributing to a 35% increase in overall revenue to $22.7 billion. This performance exceeded Wall Street's expectations of $21.86 billion [2].

Key takeaways from the Q2 results include:

1. Production Stabilization: Boeing delivered 150 commercial airplanes in the quarter, the most since 2018. The 737 MAX production hit its target of 38 per month, and the 787 Dreamliner production increased to seven per month. This stabilization in production correlated with a sharp uptick in sales, with commercial airplane revenue soaring 81% to $10.9 billion [1].

2. Improving Bottom Line: Boeing reported a $176 million loss from operations, down from a loss of $1.1 billion in the year-ago quarter. The company swung to positive earnings from operations for the first half of 2025, with a $285 million profit. Free cash flow improved to $200 million, down from $4.3 billion in the year-ago quarter. However, third-quarter free cash flow could be affected by a potential one-time payment stemming from a non-prosecution agreement with the Department of Justice [1].

3. High Demand for Products: Boeing ended the second quarter with a $619 billion backlog, including orders for more than 5,900 airplanes. The company announced a deal with Qatar Airways to buy up to 210 widebody jets, valued at $96 billion. The deal also includes options for 50 additional 787 and 777x airplanes [1].

Morningstar has revised its 2025 forecasts and fair value estimate for Boeing's stock. The fair value estimate was increased from $242 to $249 per share. Despite this revision, Boeing's stock trades about 8% below the updated fair value estimate, suggesting that the shares are fairly valued compared to its long-term fair value estimate [3].

However, Boeing faces ongoing challenges, including a strike by 3,200 union workers at its St. Louis-area defense plants, which will amplify financial pressure on the defense and space division. This labor action is smaller in scale compared to the civil aircraft strike last year, which brought manufacturing in the Seattle area to a standstill [3].

References:
[1] https://www.fool.com/investing/2025/08/04/the-biggest-takeaways-from-companys-date-earnings/
[2] https://www.postandcourier.com/ap/business/boeings-2q-loss-narrows-and-revenue-rises-topping-wall-streets-expectations/article_6de19bcf-af95-4a5d-b26e-7f8d36e9cfd5.html
[3] https://www.hindustantimes.com/world-news/boeing-defense-union-strikes-for-first-time-in-almost-30-years-101754334880910.html