After reporting a surprising loss for the third quarter and lowering its Max delivery target last week, Boeing (BA stock) provided a free cash outlook at its investor day on Wednesday that was far above Wall Street’s expectations. BA stock surged and regained a crucial level.
According to management’s statement on Wednesday, Boeing (NYSE:BA) anticipates producing free cash flow (FCF) of $1.5 billion to $2 billion in 2022. Wall Street anticipated FCF for the entire year to be $670.3 million. A $3 billion to $5 billion FCF is anticipated in 2023 as 737, and 787 deliveries pick up. Boeing anticipates $100 billion in revenue and $10 billion in normalized free cash flow by 2025.
The Dow Jones aviation and military behemoth stated on October 26 that it still anticipates a return to positive free cash flow this year. Free cash flow is a metric used by Boeing management to evaluate operational efficiency and overall liquidity.
Wall Street analysts are currently forecasting a net loss of $6.39 per share for the entire year. After four years of deficits, analysts predict that Boeing’s yearly earnings will increase in 2023.
Many investors were seeking clarification on the production and delivery targets for the best-selling 737 Max and 787 aircraft before the event because these aircraft propel Boeing’s revenues and free cash flow.
On the stock market today, Boeing shares increased by 4.6% to $150, regaining the declining 50-day line. In response to the significant Q3 earnings shortfall, BA shares swung lower on October 26, falling nearly 9%. The price of Boeing has returned to its October 26 high.
Boeing was harmed by the pandemic’s collapse of air traffic. A number of setbacks to important programs, such as the 787 and 737 jets, were also experienced.
While supply difficulties and concerns about a recession linger, the corporation keeps working on a turnaround.
In a note to clients on Tuesday, before the event, BofA Global Research analyst Ronald Epstein stated, “While many investors are focused on what Boeing’s guide will be, we are looking for much more.”
The analyst also said, “If BA’s peak valuation is ever approached again, significant reform must occur throughout the organization. We examine how BA strives to modify the culture while balancing investments, supply issues, inflation, and balance sheet deleveraging.” With a $165 price target, Epstein kept Boeing shares at a neutral rating.
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Author Valerie Remorosa 
