While 4 “Mag 7” names report this week, Tuesday morning, July 29th’s release of Boeing (NYSE:) 2nd quarter, 2025 financial results might be more eagerly awaited than the market’s leaders the last few years.
For the aerospace and defense giant, analyst consensus is expecting $21.8 billion in revenue and a loss of $1.48 in earnings per share for the 2nd quarter, 2025, as it tries to exit it’s worst business slump and loss of market confidence in it’s history.
When two fatal air crashes happened – one in October ’18 (Lion Airlines) and then again in March ’19 (Ethiopian Airlines) – the Boeing Max 737 was grounded and what has ensued following the grounding has to be one of the worst periods in terms of wanting to fly in Boeing-manufactured airplanes for the manufacturer.
Boeing’s stock price peaked at $446 per share during the week of March 6th, 2019, falling all the way to $89 per share during COVID’s market correction in March, 2020. Since then the stock has meandered from lows near $120 in 2022 and 2023 to a high near $250 in late ’23, only to get kicked right back down to the $137 – $138 area after a plane door flew off during an Alaska Air (NYSE:) flight on January 9th, 2024.
However with the naming of Kelly Ortberg as the new CEO, and a Presidential Administration that wants to see American companies succeed within the global industrial complex, the significant black cloud that has surrounded Boeing has begun to lift.
BA’s EPS and Revenue Estimate Revisions:
While neither 2025 or 2026 estimate revisions are all that robust yet, it does appear as of late July ’25 that BA will be for more profitable in 2026 and while revenue is expected to grow from 2025 to 2026 by $13 to $15 billion. Boeing will likely lose $20 billion in free-cash-flow in 2024 and 2025, but current analyst estimates expect BA free-cash-flow to be $$5.8 – $6 billion in 2026.
Finally, for what seems like an eternity, Boeing saw some good news the last month, when the Boeing appears to be completely exonerated in the tragic Air India crash, with the FAA saying that BA’s fuel switch locking mechanisms are safe.
Also Boeing published Q2 ’25 deliveries on July 8th and – at least according to the data – Q2 ’25 deliveries continued to accelerate over Q1 ’25.
Source: Boeing press release
Conclusion
Long-tail businesses like airplane manufacturing can take years to reach peak revenue, earnings, margin and cash-flow.
Morningstar recently came out and boosted their “fair value” or intrinsic value to $242 from $202 (in 2025) and the analyst who follows the company for Morningstar made an interesting observation: he noted in his report that “Overall, we expect operating margin to improve to about 13% at midcycle versus 12% in 2018—this results in more than 20% compound earnings growth per share between 2026 and 2034. ”
Just doing some back-of-the envelope earnings math, (looking above at the EPS and revenue estimate revisions):
- 1.) 2027 expected revenue of $110 billion
- 2.) expected operating margin of 13% (Morningstar estimate) = $14.3 billion
- 3.) assume a 20% tax rate = $2.86 billion
- 4.) Net income of $11.4 billion divided by 753.4 million shares outstanding equals
- 5.) $15.13 EPS (versus the current estimate of $6.67 for 2027)
Much can go wrong between now and 2027, and Morningstar’s expected operating margin might not get to 13% over the mid-cycle, but it appears to me with the Trump Administration pushing BA aircraft purchases as a part of the tariff negotiations, that Boeing has a considerable margin of safety here. With the Japan trade deal last week, Japan committed to 100 additional Boeing commercial airline deliveries (not to mention some defense spending).
With Administration support, BA should be worth at least $250 – $275, and that valuation is still well shy of the $446 all-time-high price in March, 2019.
At $223 per share today, BA is trading at 15x those expected mid-cycle EPS of $15.13.
Boeing peak revenue and EPS was $101 billion $17.85 in 2018.
Boeing is thought to have a 41% market share of the commercial airline market while Airbus (EADSY is thought to be at 56%. Boeing has obviously lost some market share to AirBus since 2019.
BA’s big ramp in terms of plane deliveries, assuming quality control can be maintained, is expected to happen in 2026 and 2027.
The stock is just a 2% position in client accounts (depending on the account) but more will be bought on any correction back near $200 or even $190.
Disclaimer: None of this is advice or a recommendation, but only an opinion. Past performance is no guarantee of future results.
Thanks for reading.