Analyzing Boeing Stock in 2024: Is it a Buy?

The aviation industry has been facing some turbulence lately, with Boeing’s stock dropping more than 30% in 2024 alone. However, for value investors, this could be an opportunity to start circling Boeing’s stock (NYSE: BA). As part of an effective duopoly with Airbus in the global wide-body and commercial narrow-body airplane market, Boeing still holds a strong market position.

Despite quality control issues and delivery delays in 2024, Boeing has the potential to grow deliveries and increase margins and profits. With a backlog of 5,625 airplanes, hitting delivery targets could significantly boost Boeing’s commercial airplanes (BCA) margins. Additionally, the stock is trading at a cheap valuation of just 11.1 times free cash flow (FCF) in 2026.

However, there are some concerns that investors should be aware of. Labor negotiations with the International Association of Machinists (IAM) could be costly, especially with unions reportedly asking for more than 40% pay raises. Additionally, the potential acquisition of key supplier Spirit AeroSystems (NYSE: SPR) could drain cash from Boeing, as Spirit has been struggling financially in recent years.

Furthermore, Boeing is still without a new CEO, which adds to the uncertainty surrounding the stock. A new CEO with a strong track record in manufacturing execution could significantly improve the investment case for Boeing.

In conclusion, while there are some potential upsides to buying Boeing stock, such as its strong market position and growth potential, there are also significant risks to consider. Investors should weigh these factors carefully before making a decision on whether to invest in Boeing.