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Valued at a market capitalization of $109 billion, Boeing (BA) is among the largest manufacturing companies in the world. But in 2024, the aircraft maker has weathered significant turbulence that started with a plug door incident on an Alaska Air (ALK) flight and the subsequent scrutiny of its 737 Max 9 lineup. Boeing stock currently trades 60% below its all-time highs and has remained under pressure since the fatal crashes of two 737 Max 8 planes within a six-month period back in 2018 and 2019.
However, Elon Musk appears to be getting bullish on Boeing stock as he expects a change in company management to address safety concerns and rebuild public trust. Musk has expressed confidence in Boeing’s new CEO, Kelly Ortberg, and has praised the leadership change on social media platform X. Notably, Musk criticized the lack of technical expertise associated with Boeing’s former CEO, Dave Calhoun. So, let’s see if Boeing stock can regain lost ground and stage a comeback in 2025.
Boeing Stock Remains Under Pressure
Shares of Boeing fell more than 2% on Monday after another devastating crash of a 737-800 aircraft operated by South Korea-based Jeju Air, which resulted in 179 fatalities. The incident triggered immediate regulatory action, with South Korean authorities ordering comprehensive inspections of all 737-800 aircraft operated by domestic carriers.
Initial reports indicate a potential bird strike may have contributed to the crash, which occurred when the plane landed without proper gear deployment at the Muan International Airport. After hitting a wall, the aircraft skidded off the runway and burst into flames.
Aviation experts note that the 737-800 has maintained a strong safety record over its nearly three-decade service history. The model represents approximately 17% of the active global jet fleet, with about 4,400 aircraft in service. Jeju Air, the largest operator of the model in South Korea with 39 jets, has denied any maintenance-related issues, stating the aircraft was covered by $1 billion in insurance.
What’s Next for Boeing Stock?
Boeing’s regulatory troubles have caused its operating margin to fall to -7.9% over the last 12 months, compared to 11.7% in 2018. Given consensus estimates, Boeing is forecast to report a free cash outflow of $14 billion in 2024. Wall Street expects Boeing to remain unprofitable in the near term, as its free cash outflow is forecast at $2.67 billion in 2025.
Boeing is not generating enough profits to service its debt obligations. In the last four quarters, Boeing reported an operating loss of $5.8 billion, while its interest expenses totaled $2.57 billion.
To shore up its balance sheet, Boeing launched a major capital-raising effort in October, offering $22 billion through a combination of common stock and convertible securities. Notably, the aircraft giant also faced financial pressure from an ongoing machinist strike in 2024, resulting in production disruptions.
The capital raise should help Boeing maintain an investment-grade credit rating and will be used to lower its debt balance. Boeing ended the third quarter of 2024 with $10.5 billion in cash and $53 billion in long-term debt. Comparatively, the company’s long-term debt was much lower at $5.8 billion in 2014.
Is Boeing Stock Undervalued?
Analysts tracking Boeing stock expect the company to report adjusted earnings of $4.26 per share in 2026, compared to a loss of $16 per share in 2024. So, priced at 35 times forward earnings, Boeing stock trades at a premium.
Out of the 25 analysts covering Boeing, 14 recommend “Strong Buy,” one recommends “Moderate Buy,” nine recommend “Hold” and one recommends “Strong Sell.” The average target price for Boeing stock is $187.92, indicating upside potential of just 7% from current levels.
Given its regulatory issues, Boeing remains a high-risk investment even at a beaten-down valuation. Despite Elon Musk’s optimistic outlook on Boeing’s new leadership, the aerospace giant faces multiple headwinds that demand investor caution.
