At what price is BA Boeing value ?

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Asked on April 15, 2023 2:05 pm
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Hi Michael,

There are a number of ways you can determine if BA provides value.

First, is by looking at the company's historical valuations. THis is a little difficult to do at the moment since BA has negative earnings but relative to some other metrics like P/B and cash flow it looks to be fairly valued.

If we compare BA to industry peers, there is a different story. From this perspective, BA is trading at a premium to industry valuations pretty much across the board.

Finally, if we look at its valuation relative to expected growth rates - it once again looks fully valued. It is trading at a discount to its own historical valuations on a forward basis, yet at a premium to peers.

All in all, I'd said BA looks fully valued here and when a company is fully valued, the expectation would be that returns would be inline with expected growth rates. In BA's case, that is the mid-to-high single-digit range for Fiscal 2023. Of note, the company is expected to return to profitability in Fiscal 2024.

Mat

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Posted by Mathieu Litalien
Answered on April 17, 2023 5:48 am