Boeing CompanyBA

Morningstar Rating

Stock Research and Analysis

by Brian Nelson, CFA

Boeing still has a long way to go before delivering its first game-changing 787, and a fickle global economy has added significant uncertainty to the jet maker's airplane delivery growth trajectory. Nonetheless, we still like this aerospace giant over Read more

Bulls Say

Boeing has a massive backlog, amounting to more than 4.5 times 2009 sales and more than 8 times its market capitalization at our fair value estimate. This should offer a nice cushion in the event of a prolonged global economic downturn.

During the next few years, Airbus will have its hands full ramping up deliveries of the superjumbo A380 and developing a viable response to the 787. As a result, we think Airbus will have a difficult time adequately contesting Boeing when the U.S. jet maker refocuses research and development efforts on the narrowbody market, a massive $1 trillion-plus opportunity during the next two decades.

Boeing sports an annual cash dividend of $1.68 per share. Read more

Bears Say

Boeing has announced significant delays in the delivery of the initial Dreamliner. Although the plane's inaugural flight seemed to go without a hitch, further 787 delivery delays may push the program into a forward-loss position on the initial accounting quantity.

Regardless of which delivers more planes, Airbus and Boeing will continue to price aggressively as each claws for market share. We also expect China to be a serious competitor by 2020, which will probably mean greater pressure on long-term BCA profitability.

Although Airbus' mostly composite A350-1000, the largest variant of the A350 family, won't be delivered until 2015 at the earliest, the plane poses a legitimate threat to sales of Boeing's 777, a similar-size widebody aircraft. Read more

Strategy

Boeing continues to build on the balance and scope of its business portfolio. The defense segment is focused on meeting the changing priorities of the U.S. military, while in commercial airplanes, Boeing Read more

Management

We believe that Boeing got its man in chairman and CEO Jim McNerney, though the jet maker has definitely had more than its share of stumbles during the last year. Yale University, Harvard Business School, Procter & Gamble PG, General Electric GE, Read more

Profile

Boeing is about half plane manufacturer and half defense contractor these days. Integrated Defense Systems, the world's second-largest defense contractor on its own, develops Read more

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