TLDR
- Boeing’s cash burn is decreasing this quarter by potentially “hundreds of millions” of dollars
- CFO Brian West gave an upbeat outlook at a Bank of America investor conference
- Boeing shares jumped nearly 7% after the positive statements
- The company aims to reach production of 38 737 Max planes monthly despite FAA caps
- Citi maintained a “Buy” rating with a $210 price target, citing undervalued long-term potential
Boeing’s financial situation appears to be improving, according to statements from the company’s CFO at a recent investor conference. This news comes as the aerospace giant works to overcome several manufacturing and safety crises that have plagued the company in recent years.
“We think we’re off to a good start for the year,” Boeing CFO Brian West said at a Bank of America investor conference on Wednesday. He noted that cash burn improvement could be in the “hundreds of millions” of dollars this quarter.
This positive outlook helped Boeing shares rise nearly 7% following his comments. The stock has gained approximately 9.25% over the past week.
Boeing has struggled financially in recent years. The company went through about $14 billion last year, including more than $4 billion in the last three months of 2024.
These financial challenges were made worse by a nearly two-month labor strike at Boeing’s largest factories. The company has not posted an annual profit since 2018.
Despite these difficulties, West expressed confidence in Boeing’s production goals. The company aims to reach monthly output of 38 737 Max aircraft and seven 787 Dreamliners.
The Federal Aviation Administration (FAA) barred Boeing from exceeding 38 Max planes per month following the January 2024 midair blowout of a door plug on a passenger jet. New Transportation Secretary Sean Duffy has confirmed this cap remains in place.
West also addressed concerns about a massive fire at a Pennsylvania aviation fastener factory in February. He stated it won’t have a near-term production impact due to Boeing’s elevated inventory of parts.
On the topic of tariffs proposed by President Donald Trump, West brushed off immediate concerns. However, he noted that any impact would depend on how long the uncertainty lasts.
The aerospace company has faced numerous challenges since the two fatal crashes of its 737 Max aircraft in 2018 and 2019. These incidents led to a worldwide grounding of the plane model and intense regulatory scrutiny.
Boeing holds an order backlog of $521 billion, which analysts see as a positive sign for the company’s future once current headwinds subside.
Analyst gives stock a “Buy” rating and a price target of $210
Citi recently reiterated its “Buy” rating for Boeing with a share price target of $210. The analyst believes the market is currently undervaluing the company’s long-term growth potential.
Boeing is not only facing challenges in its commercial aircraft division. The company is also a major defense contractor, producing various military equipment and space systems for customers in over 150 countries.
The defense sector has seen mixed performance recently. European defense stocks have experienced robust gains as European nations increase defense spending. Meanwhile, American defense stocks, including Boeing, have struggled to capitalize on this global trend.
Despite these challenges, some analysts believe this could be an opportune time to invest in American defense stocks. As Citi analyst Jason Gursky noted, “We don’t view [the current world order] to be any less dangerous or one that decreases the need to acquire the tools of deterrence.”
As Boeing works to improve its financial situation and production capabilities, investors and industry watchers will be closely monitoring the company’s progress in overcoming its recent challenges.
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