Stock Analysis & Valuation The Boeing Company (BA.SW)

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Valuation method	Value, CHF	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method		n/a
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Strategic Investment Analysis

Company Overview

The Boeing Company (BA.SW) is a global leader in aerospace and defense, specializing in the design, development, manufacturing, and servicing of commercial jetliners, military aircraft, satellites, and space exploration systems. Headquartered in Chicago, Illinois, Boeing operates through four key segments: Commercial Airplanes, Defense, Space & Security, Global Services, and Boeing Capital. The company serves a diverse clientele, including airlines, governments, and commercial space enterprises, with a strong emphasis on innovation and technological advancement. Boeing's Commercial Airplanes segment dominates the global aviation market, producing iconic aircraft like the 737, 787, and 777 families. The Defense, Space & Security segment supports national security with advanced military aircraft, missile defense systems, and satellite technology. Boeing's Global Services division provides comprehensive aftermarket support, including maintenance, training, and digital solutions. Despite recent challenges, Boeing remains a cornerstone of the aerospace industry, driving advancements in sustainable aviation and space exploration.

Investment Summary

Boeing presents a high-risk, high-reward investment opportunity. The company's strong market position in commercial aviation and defense sectors offers long-term growth potential, particularly as global air travel recovers and defense spending increases. However, Boeing faces significant headwinds, including ongoing regulatory scrutiny, supply chain disruptions, and a net loss of $2.22 billion in FY 2023. The suspension of dividend payments and high debt levels ($52.6 billion) further complicate the investment thesis. Investors should weigh Boeing's industry leadership and backlog of orders against its operational and financial challenges. The stock's high beta (1.555) indicates volatility, making it suitable for risk-tolerant investors with a long-term horizon.

Competitive Analysis

Boeing's competitive advantage lies in its diversified portfolio, technological expertise, and global reach. The company is one of only two major manufacturers of large commercial aircraft (alongside Airbus), giving it significant pricing power and market influence. Boeing's Defense, Space & Security segment benefits from long-term government contracts, providing stable revenue streams. However, Boeing has faced setbacks due to the 737 MAX crisis and production delays, eroding some of its competitive edge. Airbus has capitalized on these challenges, gaining market share in the commercial aviation sector. Boeing's Global Services division is a key differentiator, offering high-margin aftermarket services that enhance customer loyalty. The company's investments in sustainable aviation, such as the 787 Dreamliner and future eco-friendly aircraft, position it well for industry trends. Nevertheless, Boeing must address operational inefficiencies and rebuild trust with regulators and customers to maintain its leadership position.

Major Competitors

• Airbus SE (AIR.PA): Airbus is Boeing's primary competitor in the commercial aviation market, with a strong portfolio including the A320neo and A350 families. Airbus has gained market share due to Boeing's 737 MAX issues and offers competitive pricing. However, Airbus faces its own challenges, including supply chain constraints and reliance on European government subsidies. The company's defense and space segments are smaller than Boeing's, limiting its diversification.
• Lockheed Martin Corporation (LMT): Lockheed Martin is a leader in defense and aerospace, specializing in military aircraft (e.g., F-35), missiles, and space systems. It competes with Boeing's Defense, Space & Security segment but has a stronger focus on military contracts. Lockheed's stable government funding provides revenue consistency, but its limited presence in commercial aviation reduces exposure to that market's cyclicality. The company's technological edge in stealth and hypersonic systems is a key strength.
• RTX Corporation (RTX): RTX (formerly Raytheon Technologies) is a major player in defense and aerospace, with strengths in engines (Pratt & Whitney), avionics, and missile systems. It competes with Boeing in defense and aftermarket services but lacks a commercial aircraft manufacturing division. RTX's diversified portfolio and strong R&D capabilities are offset by recent challenges with engine reliability (e.g., GTF engine issues).
• General Electric Company (GE): GE Aerospace is a key supplier to Boeing, providing engines (e.g., GE9X for the 777X) and avionics. While not a direct competitor in aircraft manufacturing, GE's spin-off of its aerospace division could increase its focus on competing in aftermarket services. GE's strength in engine technology is balanced by its historical financial struggles and restructuring efforts.
• Embraer S.A. (ERJ): Embraer specializes in regional and business jets, competing with Boeing's smaller aircraft offerings (e.g., 737 MAX 7). The company has a strong presence in the regional jet market but lacks the scale to challenge Boeing in large commercial aircraft. Embraer's agility and lower costs are advantages, but its limited R&D budget restricts innovation compared to Boeing.