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Boeing's 737 MAX Can Return to Service in the U.S., but the Company Still Has a Long Turnaround

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

On Nov. 18, the U.S. Federal Aviation Administration rescinded the emergency order that grounded Boeing’s 737 MAX in March 2019, paving the way for its reintroduction into U.S. operations and the resumption of deliveries to U.S. customers. This is a critical step in our bullish thesis on Boeing, but it’s only the first in a series of steps in the company’s turnaround. We maintain our $260 per share fair value estimate and do not see a compelling margin of safety in shares at current prices.

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Company Profile

Business Description

Boeing is the world's largest aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital. Boeing's commercial airplanes segment produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards. Boeing's defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively. Boeing's global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit.

Contact
100 North Riverside Plaza
Chicago, IL, 60606-1596
T +1 312 544-2000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 161,100

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