Boeing (NYSE: BA) may not be the most popular stock right now, but long-term investors are taking a closer look at its potential. The aerospace giant operates in three key segments: Boeing Commercial Airplanes (BCA), Boeing Defense, Space & Security (BDS), and Global Services (BGS). While recent updates have been mixed, there are signs of progress that could make Boeing an attractive value play.
BDS has returned to profitability, overcoming issues from problematic fixed-price development programs. CEO Kelly Ortberg noted that the KC-46 program is now low risk, and the company is booking better orders. Meanwhile, BCA faces challenges in ramping up 737 MAX production, with expectations pushed back to 2027 for stabilizing at 47 deliveries per month. The 777X, set for certification in 2027, is another key focus for future cash flow.
Management's free cash flow guidance may be conservative, offering upside potential. CFO Jesus Malave outlined the building blocks for $10 billion in free cash flow by 2029, including higher production rates for the 737 MAX and 787. If these targets are met, the market could quickly price in the positive outlook. With a massive backlog of $745 billion and improving execution, Boeing presents a compelling case for value-oriented investors.