Investing in Boeing shares in 2024

-In this article, we'll take a look at the Boeing share, the company's activities, its annual results, its share price, its performance, a Boeing - Airbus comparison, and how to buy or sell Boeing shares so you can make up your own mind.

-Introducing Boeing
Boeing (The Boeing Company) is an American company specializing in the manufacture and marketing of civil and military aircraft. It belongs to the Industry sector, more specifically Aerospace and Defense. Boeing is present in over 150 countries worldwide, with 150,000 employees. Boeing is headquartered in Arlington, Virginia, and its CEO is Dave Calhoun.

Boeing designs aircraft lines such as the 737, 747 (double-decker airliner), 767, 777 and 787. Boeing's main competitor is Airbus.

Boeing results and key figures - Financials
Here is some data from Boeing's income statement.

2022 :

Sales (in millions of dollars): 66,608 
Net income (in millions of dollars) : - 5 053
EPS (1) (in dollars) : - 8,30
PER (2): - 23.0x

2021 :

Sales (in millions of dollars): 62,286
Net income (in millions of dollars) : - 4 290
Earnings per share (1) (in dollars) : - 7,15
PER (2): - 28.2x

(1) EPS: Earnings Per Share. Equivalent to the theoretical enrichment of the shareholder, the higher it is, the more profitable the company.

(2) PER: Price Earning Ratio. It is calculated by taking the share price / EPS. Theoretically, if the PER is below 10, the share is undervalued; between 10 and 20, the share is at its price; above 20, the share is overvalued. But to use this tool properly, you need to compare it with competitors.

For the fourth year running, Boeing is in deficit. In 2022, Boeing still has a net loss of -$5 billion. But its net loss has narrowed since 2020 (it reached $11.9 billion).

-Boeing has been affected by several consecutive crises. First, the 20-month flight ban on the 737 MAX after the Lion Air crash in October 2018 and the Ethiopian Airlines crash in March 2019. The group is still in the process of liquidating its inventory to date. Secondly, the Covid-19 pandemic from March 2020, which grounded aircraft at airports and interrupted flights for several weeks. Secondly, the suspension of deliveries of the 787 Dreamliner, following the discovery of manufacturing defects in summer 2020. And most recently, a new defect was discovered in the 737 MAX. We'll come back to this in our fundamental analysis (see below).

-At the same time, it's worth mentioning that sales have risen, as Boeing's business is on the rise, and the aircraft manufacturer says it wants to meet demand and honor its commitments. In fact, Boeing has indicated that by 2022 it will have delivered 480 aircraft and booked 774 new orders, compared with 340 deliveries and 479 new orders in 2021.

-What's more, with the publication of its first-quarter 2023 results, Boeing recorded its best quarterly results since 2019. While order cancellations have had an impact to date and weighed on the bottom line, the exemption granted by the US Congress in December saved Boeing from having to bring all its 737 MAX models into compliance with the national standard, thus saving orders in extremis.
Boeing shareholders
The following is a list of Boeing's major shareholders and their shareholdings.

Newport Trust Co (7.40%)
The Vanguard Group, Inc. (7.33%)
Capital Research & Management Co (6.57%)
Evercore Trust Company, NA (5.63%)
SSgA Funds Management, Inc. (4.43%)

Boeing dividends
Boeing does not pay dividends to its shareholders, which means that shareholders can only make profits by reselling shares at a capital gain.

Boeing share price, 2024 outlook and forecasts - Technical analysis
Graphical analysis of Boeing's share price is an important part of discovering pivot points and the stock's trend.

Technical Analysis Chart Boeing Share Outlook Forecasts
Source: Admirals MetaTrader 5 Supreme Edition, Boeing, weekly chart (between April 12, 2020 and April 26, 2023), produced on April 26, 2023, at 11:00 GMT.
Note: past performance is not a reliable indicator of future results, nor of future performance.

To continue our analysis of Boeing shares, it is important to carry out a technical analysis of Boeing shares. The Boeing curve provides us with information that should not be overlooked when attempting to determine future progress.

We can identify three possible scenarios: bullish, range and bearish.

Bullish scenario
Should the resistance line at €222 be breached from above, the trend would be bullish, with €244 in sight over the medium term and €277 over the long term.

Range scenario
If Boeing's share price remains within its €190 - €222 range, it could move back and forth between these two lines without breaking them.

Bearish scenario
At the time of writing, Boeing's share price is in a bearish trend. If the €190 support line is breached from below, €170 will be in sight in the medium term, and potentially €123 in the long term.

Fundamental analysis: Boeing, Covid-19 and manufacturing defects
Fundamental analysis is important for understanding the current geopolitical situation and analyzing its impact on Boeing shares.

In addition to the global Covid-19 crisis, Boeing has faced repeated crashes in recent years, linked to its 737. Since 2020, Boeing has been hoping to emerge from this situation with a strategic plan called "Mitigating Risks and Moving Forward". It's clear that the turning point was the pandemic, but the repercussions of the 737 MAX's problems are still being felt today. The priorities of this plan are a return to service of the aircraft, more liquidity, strict product compliance and the development of fixed-price programs.

The return to service of the 737 MAX has been in jeopardy since April, due to the discovery of a manufacturing defect affecting components manufactured by supplier Spirit AeroSystems SPR.N. This problem will force Boeing to delay deliveries in 2023 and return some aircraft to production.

In terms of liquidity, Boeing's goal is to achieve free cash flow of around $10 billion by 2025-2026, compared with $2.3 billion in 2022. For 2023, Boeing expects free cash flow of between $3 and $5 billion.

Boeing also plans to diversify its order book. For the time being, the company acknowledges in its 2022 annual report that it is "heavily dependent on commercial airlines" in relation to the Defense and Space business, which can be a risk factor. For example, Boeing is currently working with NASA on a project for a transonic wing-stayed aircraft, with a 2030 horizon and the aim of decarbonizing flights, particularly in the face of Airbus's hydrogen-powered aircraft project scheduled for 2035.

Conclusion Boeing share
Boeing is clearly in the red. The company is still loss-making, for the fourth year in a row, it is going through one crisis after another and is plagued by repeated crashes. While deliveries have soared, the new 737 MAX manufacturing defect threatens to jeopardize the company's turnaround and hamper its objectives for 2023.

After this unexpected announcement, investors demanded an explanation from the aircraft manufacturer. The reaction was swift, and Boeing shares immediately fell by 5.5%. Despite this, on the same day, Goldman Sachs maintained its buy recommendation on Boeing shares, and expects the price to rise over the course of the year. Boeing insists it will increase its 737 MAX production rate despite the recent flaw, and says 2023 will be "decisive".

What's your opinion on Boeing shares?

With the recent boeing events, can you be confident?