Boeing: The Worst Is Over, Time to Buy?

Boeing (NYSE: BA) has had a tumultuous year, marked by regulatory issues, worker strikes, and significant losses. However, with the fourth quarter results now in, investors may be wondering if the worst is truly behind the aerospace giant. Let's delve into the recent developments and assess whether Boeing is poised for a comeback in 2025.

Boeing's fourth-quarter 2024 results were indeed dismal, with the company reporting a loss of $5.46 per share, far exceeding the $1.40-per-share Visible Alpha consensus estimate. The loss was attributed to several factors, including a nearly two-month strike by the International Association of Machinists & Aerospace Workers (IAM), charges around its defense segment, and staff cuts. The strike alone cost Boeing an estimated $5.5 billion in earnings.



Despite the grim outlook, Boeing has taken several steps to stabilize its business and improve its financial outlook. The company reached an agreement with the IAM, ending the costly production halt. Additionally, Boeing raised over $20 billion in cash, strengthening its balance sheet. The company also resumed production of its 737, 767, and 777/777X aircraft, with plans to gradually ramp up production to 37 737 MAX aircraft per month by May 2025.

Boeing's competitors, such as Airbus, have been actively pursuing Boeing's customers and could potentially gain market share if Boeing's production and delivery issues persist. However, Boeing's strong order backlog of over half a trillion dollars and its unique position in the defense sector make it a compelling investment opportunity.



Lower oil prices could also boost airline margins and drive demand for Boeing's aircraft. The Trump administration's plans to increase oil production could contribute to lower fuel prices, benefiting Boeing by potentially driving up aircraft orders.

In conclusion, while Boeing's Q4 losses were indeed significant, the worst may be over for the aerospace giant. With a strong order backlog, a unique position in the defense sector, and the potential for lower oil prices to boost demand, Boeing may be poised for a comeback in 2025. Investors should closely monitor Boeing's progress and consider adding the stock to their portfolios if they believe the company can execute on its plans to stabilize its business and improve its financial outlook.