“BA’s Secret Deal Could Skyrocket Your Portfolio!”

Introduction

Boeing Co. (NYSE: BA) is banking on a few game-changing deals that could revitalize its fortunes after years of turmoil. In March 2025, Boeing stunned the industry by winning a secretive U.S. Air Force contract for the Next Generation Air Dominance fighter jet, beating out rival Lockheed Martin (^[1]). This sixth-generation fighter (dubbed “F-47”) is valued at over $20 billion initially and could generate hundreds of billions in long-term revenue as it replaces aging F-22 jets (^[1]). Around the same time, Boeing secured its largest-ever commercial order – a deal with Korean Air for 103 jetliners worth $36.5 billion (about $50 billion including engines and service contracts) (^[2]). These “secret” or under-the-radar wins have given Boeing’s stock a much-needed boost – shares jumped ~5% on the fighter-contract announcement (^[1]) – fueling optimism that Boeing may finally be regaining altitude. But to understand if Boeing can truly skyrocket your portfolio, we need to examine its fundamentals: dividend status, financial leverage, valuation versus peers, as well as the risks and red flags that still loom.

Dividend Policy & History

Boeing was once a reliable dividend payer, but shareholder payouts have been on pause since 2020. The company suspended its dividend indefinitely in early 2020, conserving cash as the 737 MAX crisis and COVID-19 pandemic hit aerospace demand (^[3]). As a result, Boeing paid no dividends in 2021 or 2022, versus about $1.2 billion in dividends paid in 2020 (mostly before the suspension) (^[3]). The dividend remains halted to this day, and Boeing has also refrained from share buybacks – a stark reversal from the aggressive buyback program in the 2010s. Yield is effectively 0% for Boeing investors currently, and management has signaled that restoring dividends is contingent on a sustained financial recovery (especially generating positive free cash flow and reducing debt). In fact, Boeing’s new CEO has emphasized balance sheet repair over near-term shareholder returns. Given the ongoing losses and cash burn (detailed below), analysts generally do not expect Boeing to resume its dividend for several more years, unlike rival Airbus which has already reinstated payouts. For income-focused investors, Boeing stock offers no current yield, and the timeline for future dividends remains an open question.

(AFFO/FFO are not standard metrics for Boeing – those are typically used for REITs. For Boeing, a more relevant cash flow metric is free cash flow from operations. Boeing’s FCF turned deeply negative in recent years, so any discussion of dividend coverage must note that Boeing is not generating the cash to support payouts at present.)

Leverage, Debt Maturities & Coverage

Boeing’s balance sheet is heavily leveraged after accumulating debt through its crisis years. As of year-end 2022, Boeing’s total debt stood at $57.0 billion (^[3]). The company borrowed tens of billions in 2019–2020 to survive the 737 MAX grounding and COVID downturn. Today, Boeing is carrying a debt load that is 5–6× pre-crisis levels, and this debt comes with significant obligations. Approximately $14.5 billion in principal is coming due over 2023–2025 (^[3]), creating pressure to refinance or repay those maturities. Boeing has managed to push out some maturities by tapping capital markets – notably, in late 2024 Boeing raised a whopping $21.1 billion through an expanded share sale, one of the largest equity offerings ever, to shore up liquidity and avoid a downgrade to junk status (^[4]). This massive dilution bolstered Boeing’s cash reserves, intended to help pay down debt and improve credit metrics. In June 2025, Fitch Ratings noted Boeing’s plan to reduce debt below $50 billion by 2026, aided by repaying about $7.95 billion of maturing notes in the near term (^[5]).

Carrying such debt has consequences – Boeing’s interest expense exceeds $2.5 billion per year (^[3]), a heavy fixed cost at a time when operating profits are elusive. With the company still posting net losses, traditional interest coverage ratios are very weak (on an earnings basis, coverage is negative). Even on a cash-flow basis, coverage is strained: Boeing burned cash heavily in 2024, so it’s effectively paying interest out of its cash buffers and new financing. In the first half of 2024 alone, Boeing had -$8.3 billion free cash outflow (^[6]), and it was on pace for about -$10 billion cash burn for the full year (^[6]). This means operating cash flow wasn’t even covering capital expenditures, let alone $2+ billion of interest. The recent equity raise provided breathing room, and management aims to return to positive cash flow by 2025–2026 by ramping aircraft deliveries. Credit agencies have kept Boeing at the lowest investment grade – BBB- – just one notch above junk. Fitch revised Boeing’s outlook to stable in mid-2025 due to some improvements, but it affirmed the BBB- rating and is watching that debt reduction plan closely (^[5]). Boeing cannot afford another major financial setback without risking a downgrade. The leverage and interest burden remain key risks, although the company has now amassed a war chest of liquidity (bolstered by the 2024 share issuance) to meet near-term debt maturities and operational needs.

Valuation and Comparable Metrics

Valuing Boeing is challenging because earnings are currently negative – traditional P/E ratios are not meaningful. Instead, investors look at metrics like EV/EBITDA, price-to-sales, and especially forward earnings or cash flow estimates (betting on Boeing’s turnaround). Boeing’s stock price has roller-coastered with its crises. After peaking near $440 in 2019, the stock plunged below $150 during the 2020 pandemic, and it remains far below the highs. In 2024, Boeing shares fell over 40%, wiping out about $60 billion in market value and making Boeing one of the worst performers in the Dow (^[6]). The stock hit a low around $137 in late 2024 amid production halts and a worker strike (^[7]). By December 2024, it had only partially rebounded to about $177 (^[7]) – still a deep decline for the year. In contrast, Airbus (Boeing’s European rival) saw its stock rise in 2024, and Airbus’s market capitalization at one point surpassed Boeing’s. This divergence reflects fundamentals: in 2024 Airbus earned €4.2 billion profit on ~$75 billion in revenue, whereas Boeing lost $11.8 billion on ~$66 billion revenue (^[8]). Airbus delivered far more jets (e.g. 497 deliveries vs Boeing’s 291 through late 2024) (^[6]) and has ~50% of the global aircraft market, while Boeing’s share slipped to ~45% (^[8]).

Despite the losses, Boeing’s valuation remains elevated on hope of a turnaround. Boeing’s enterprise value is propped up by its massive backlog and duopoly position. The company reported a $404 billion total backlog of orders at 2022 year-end (^[3]) – an order book spanning many years of production. This supports a price-to-sales multiple higher than one might expect for a troubled firm. At around $180–$200 per share in 2025, Boeing trades at roughly 2× sales, which is a premium to Airbus (around 1.3× sales) and extremely high relative to current cash flows. Bulls argue the stock is valued at ~20× projected 2026 earnings, assuming Boeing’s free cash flow and margins recover by then. Skeptics counter that Boeing is priced for perfection, given it’s not generating profits yet and faces execution challenges. It’s worth noting Boeing’s book value was driven negative during the crisis (shareholder equity turned negative in 2020-2021 due to cumulative losses and past buybacks). Only after the $21 billion capital raise in 2024 does Boeing likely have a modest positive equity again. In summary, Boeing’s valuation mostly reflects future recovery potential rather than present fundamentals. Any comparison to Airbus underscores this: Airbus is profitable, pays a dividend, and trades at a reasonable ~15× earnings, whereas Boeing is a turnaround story with a rich price tag. For investors, the upside is that if Boeing’s “secret deals” and turnaround plan succeed, earnings could ramp up dramatically in a few years – justifying the valuation. But if the company stumbles again, the stock’s downside could be significant given the thin margin for error.

【57†1†embed_image】 Boeing’s newest long-haul jet, the 777X, at the Dubai Airshow. 777X development has been delayed by several years, illustrating Boeing’s recent execution challenges. Competitor Airbus has capitalized on Boeing’s product gaps (e.g. no true rival to the A321neo in the mid-market). Rebounding from these missteps is crucial to Boeing’s valuation recovery. (^[9]) (^[8])

Risks and Red Flags

While Boeing’s recent contract wins are encouraging, multiple risks and red flags remain that investors should weigh:

– Operational and Quality Issues: Boeing’s reputation for engineering excellence took a hit after the 737 MAX safety crisis, and quality control problems persist. In 2024, a mid-air panel blowout on a 737 MAX test flight raised fresh safety concerns (^[6]). Manufacturing defects have repeatedly halted 787 Dreamliner deliveries in recent years. These issues highlight cultural and oversight problems that new CEO Kelly Ortberg is now trying to fix. Ortberg has acknowledged damage to Boeing’s once-iconic reputation and the need for a fundamental cultural change (^[10]). Quality lapses not only invite regulatory scrutiny but also erode customer trust, potentially hurting Boeing’s ability to win orders (especially since airlines have alternatives with Airbus).

– Production & Supply Chain Constraints: Boeing is struggling to increase production to meet demand. Global supply chain disruptions (e.g. engine and parts shortages) and labor instability have caused Boeing to miss delivery targets (^[6]). In 2024, Boeing delivered only 291 airliners by late-year, dramatically lagging Airbus’s 497 deliveries (^[6]). A major machinist strike in the fall of 2024 shut down Boeing’s West Coast factories for weeks, costing the company up to $3.5 billion and further delaying jet outputs (^[6]). Even after the strike settlement, Boeing had to re-certify workers and rethread its supply lines – a slow recovery. If Boeing cannot reliably scale up 737 MAX and 787 production (and successfully introduce the 777X), it may lose more market share to Airbus, which has a smoother production ramp.

– Financial Strain and Execution Risk: Boeing’s financial position is fragile for a company of its size. The company has accumulated over $35 billion in losses since the 737 MAX grounding in 2019 (^[11]). It posted a huge $11.8 billion net loss in 2024 – its worst loss since 2020 (^[9]) – due to a cascade of problems (737 MAX incident costs, a $5.4 billion loss in the defense segment from fixed-price contract overruns, the strike impact, and other charges) (^[9]). Such steep losses have eroded Boeing’s capital and increase the risk that it might need to raise cash again if the turnaround doesn't gain traction. Indeed, Boeing’s CFO has floated measures like potential further equity offerings or asset sales to bolster the balance sheet (^[10]). For shareholders, that’s a red flag: any additional equity dilution or strategic asset divestitures could temper future returns. Boeing’s interest burden and debt covenants also mean it must execute near flawlessly in coming years – there is little financial cushion if assumptions on cash flow recovery fall short. Simply put, Boeing is not out of the woods and is one severe setback away from possible financial distress given its high debt (e.g. another grounding or a global recession could be very damaging).

– Competitive and Market Risks: Boeing faces intense competition from Airbus in all key markets. Airbus has a strong product lineup (the A320neo family dominates the single-aisle market, especially the A321XLR for which Boeing currently has no equivalent). This has led Airbus to overtake Boeing in both deliveries and order share for the past five years (^[8]). Boeing’s hesitation to launch a new mid-market airplane is allowing Airbus to consolidate its lead in the 200-240 seat segment. Additionally, emerging competitors lurk on the horizon – China’s state-backed COMAC has begun delivering its C919 jet, aiming (in the long term) to break the Boeing/Airbus duopoly in narrow-body jets. Geopolitical dynamics also play a role: Boeing’s relationship with China is strained (trade tensions delayed the 737 MAX’s re-certification there). If Chinese airlines favor Airbus or COMAC due to politics, Boeing could lose a historically large market. On the defense side, Boeing’s win of the NGAD fighter is huge, but Lockheed Martin and Northrop will fiercely contest future defense programs – and Boeing must prove it can execute without the costly overruns that plagued its tanker and spacecraft projects. Macro-economic factors are another risk: a global recession or higher interest rates could prompt airlines to defer aircraft purchases, shrinking Boeing’s backlog. (Boeing’s own filings warn that its multi-year backlog can be vulnerable to economic and travel downturns (^[3]).) Rising interest rates also make aircraft leasing and financing more expensive, potentially softening demand for Boeing’s jets. All these factors underscore that Boeing’s road to full recovery is not guaranteed.

– Governance and Oversight: Investors have raised concerns about Boeing’s governance and management credibility. The 737 MAX crisis revealed shortcomings in Boeing’s safety oversight and a management culture seen as prioritizing cost-cutting and shareholder returns over engineering rigor (^[6]). The fallout led to leadership changes – Boeing has had three CEOs since 2019 – and numerous investigations. While new CEO Ortberg brings respected industry experience, he faces the task of re-building trust with regulators (like the FAA), airline customers, and the flying public. Any further misstep could result in harsher regulatory action or reputational damage. Boeing also faces legal risks (e.g. ongoing lawsuits from the MAX crashes, SEC fines as in 2021 (^[3]) for past disclosures, etc.). Strong governance and a renewed safety-first culture are essential to prevent future crises. This is a “soft” risk factor but a critical one: Boeing must restore its brand image as a reliable aircraft maker. Until that is evident, some investors will discount Boeing’s valuation relative to peer Airbus.

In sum, Boeing remains a high-risk, high-reward story. The company is dealing with the after-effects of “a year of turbulence” in 2024 that saw production drops, billions in cash burn, and stock underperformance (^[6]). Its challenges – both internal and external – form a wall of worry that investors need to monitor closely.

Open Questions & Outlook

As Boeing works through its turnaround, several open questions will determine whether the stock truly skyrockets or just sputters along:

– When (and how) will Boeing restore shareholder returns? With dividends suspended and buybacks on hold, investors wonder when Boeing might resume dividends or share repurchases. Management has indicated it won’t resume capital returns until the company is consistently profitable and debt is much lower. Will that be 2025? 2026? Or even later? The timing of returning cash to shareholders will signal confidence (or lack thereof) in Boeing’s recovery.

– Can Boeing meet its ambitious cash flow and debt reduction targets? Boeing has outlined goals to achieve positive free cash flow and to pay down ~$7–10 billion of debt by mid-decade (^[5]). After years of over-promising and under-delivering, it’s an open question whether Boeing can hit these financial targets. Achieving them likely requires no major hiccups in production and delivery of hundreds of planes a year, plus smooth execution of cost-cutting. Any slip-up (e.g. a supplier issue or another costly fix) could delay the company’s deleveraging plans and keep credit ratings at risk.

– Will Boeing launch a new plane to close the gap with Airbus? Boeing’s product lineup is aging; for example, it has no direct answer to Airbus’s fast-selling A321neo family. There’s speculation about a future “mid-market” airplane, but Boeing has been cautious about launching new programs given its financial strain (^[9]). The longer Boeing waits, the more market share it cedes in key segments. A big question is if and when Boeing will commit to designing a new commercial jet (and whether it can afford to). Such a move could be a catalyst – or a financial strain – depending on how it’s managed.

– Can Boeing execute the new defense contracts profitably? Winning the Air Force’s NGAD fighter was a coup, but now Boeing faces the challenge of executing this vast, secretive program on budget. In recent years, Boeing’s defense unit has been hit with charges on fixed-price contracts (tanker programs, presidential Air Force One jets, etc.) that led to huge losses (^[9]). It’s an open question whether Boeing has addressed the issues (like underestimating costs) in its defense business. Will the F-47 fighter deal be a triumph or another potential quagmire? Successful execution could open the door to more Pentagon wins, whereas overruns would eat into the anticipated long-term $120+ billion revenue opportunity.

– How quickly can Boeing fix its culture and rebuild trust? After the 737 MAX crisis, Boeing’s internal culture of safety and transparency was widely questioned. The company says it is making fundamental changes – training, management reshuffles, empowering engineers – but cultural shifts take time. Regulators (FAA, EASA) are scrutinizing Boeing more than ever, and airlines are too. The open question is: has Boeing truly learned from its mistakes? The answer will be seen in whether we get safer, problem-free aircraft introductions going forward. This intangible factor will greatly influence Boeing’s long-term success and stock performance.

– Could there be more unforeseen hurdles? Boeing’s journey since 2019 shows that surprises (often bad ones) can materialize – from global pandemics to hidden design flaws. Investors must ask what unknown unknowns might still be lurking. For instance, will supply chain fragility resurface? Could there be new regulatory mandates that increase costs? Might macroeconomic stresses (interest rates, oil prices, etc.) hit aircraft demand? Boeing’s situation is improving, but its recovery is not a straight line, and shareholders should be prepared for bumps in the road.

Bottom Line: Boeing’s “secret deals” – the defense contract win and the mega Korean Air order – indeed highlight the upside potential for this aerospace giant. The company has enormous backlog and franchise value, and if it executes well, the stock could have substantial runway. However, Boeing is still in the middle of a hard-fought turnaround. It must prove that 2024 was the bottom and that from here on, cash flows and margins will climb steadily. For investors, Boeing offers a classic high-risk/high-reward proposition. Success in resolving its challenges and meeting its targets could very well send the stock soaring (recall that Boeing traded near $400/share just a few years ago). On the other hand, any major setback or delay could keep the stock grounded. As of now, Boeing’s story is about potential: huge contracts and backlog, but with significant baggage. Keep an eye on how Boeing delivers in 2025–2026 – those results will likely determine whether BA truly skyrockets your portfolio or ends up a turbulent ride.

Sources

1. https://reuters.com/business/aerospace-defense/trump-awards-boeing-much-needed-win-with-fighter-jet-contract-sources-say-2025-03-21/
2. https://reuters.com/business/aerospace-defense/korean-air-makes-airlines-biggest-ever-boeing-jet-order-amid-trump-lee-summit-2025-08-25/
3. https://edgar.secdatabase.com/1357/1292723000007/filing-main.htm
4. https://bnnbloomberg.ca/investing/2024/10/29/boeing-raises-21-billion-in-capital-hike-to-boost-liquidity/
5. https://reuters.com/business/aerospace-defense/fitch-revises-boeing-outlook-stable-2025-06-30/
6. https://reuters.com/business/aerospace-defense/boeings-year-turbulence-five-charts-2024-10-11/
7. https://reuters.com/business/aerospace-defense/boeing-track-be-2024s-biggest-loser-dow-jones-index-2024-12-31/
8. https://ainvest.com/news/airbus-overtakes-boeing-structural-shift-aerospace-industry-means-investors-2508/
9. https://reuters.com/business/aerospace-defense/boeing-reports-118-bln-loss-largest-since-2020-2025-01-28/
10. https://reuters.com/business/aerospace-defense/boeing-ceo-presses-turnaround-embattled-planemaker-contract-vote-looms-2024-10-23/
11. https://apnews.com/article/628c704b8642693f0ba5060eeede22d3

For informational purposes only; not investment advice.