Boeing's Biggest Strategic Challenge Explained in 1 Chart
Key Points
The airplane maker's 737 MAX has not been the profit and cash generator that management had expected.
Funding the next generation of narrow-body planes could require raising debt or diluting existing shareholders.
- 10 stocks we like better than Boeing ›
Boeing (NYSE: BA) first delivered the 737 MAX in 2017, and it's fair to say the narrow-body plane hasn't produced the financial performance that management had hoped to see.
Part of the problem is self-inflicted due to safety and quality issues on its commercial airplanes and poor execution in defense, and others are beyond Boeing's control (the COVID-19 lockdowns). However, weak earnings and cash flow from the 737 MAX are putting Boeing's major strategic mission at risk.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
What Boeing needs to do
CEO Kelly Ortberg's mission couldn't be any clearer. On his first earnings call as CEO in October 2024, he outlined, "At the right time in the future, we need to develop a new airplane, but we have a lot of work to do before then." In all probability, he was talking about a new narrow-body airplane to replace the 737 MAX.
Image source: Getty Images.
It's a plane that previous Boeing CEO Dave Calhoun said could cost $50 billion to develop -- and therein lies the problem. Even though that investment won't be made in one shot, Boeing's cash flow from the 737 MAX hasn't been enough to put the money in the bank to give investors confidence in Boeing's ability to finance it.
Looking at the Wall Street analyst consensus out to 2028, Boeing is estimated to be still carrying $5.9 billion worth of net debt, as even the return to free cash flow generation in 2026 to 2028 won't be enough to fully pay down the debt built up during the years of the 737 MAX grounding and the COVID-19 lockdowns.
Data source: S&P Global Market Intelligence. Figures from 2026 onwards are Wall Street analyst consensus estimates.
What it means to Boeing investors
All of this is not to argue that Boeing won't be able to fund a new aircraft. It surely will; after all, it has a $682 billion backlog across the whole company, with more than $560 billion in Boeing Commercial Airplanes (BCA). That underlying strength will allow it to borrow money or raise equity, as Boeing did in 2024 when it raised $24.3 billion by selling stock.
However, as the chart shows, the stock offering dilutes existing shareholders' claims to future earnings and cash flows.
BA Shares Outstanding data by YCharts
Moreover, the analyst's forecasts in the chart don't account for any surprises over the next decade, when Boeing should be developing a new aircraft for launch in the mid-2030s.
While 2035 may seem a long time away, $50 billion is a huge number, and investors need to factor in the risk of further dilution or debt, given that the current cycle of cash generation from the 737 MAX hasn't met expectations.
Should you buy stock in Boeing right now?
Before you buy stock in Boeing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Boeing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,066!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,087,496!*
Now, it’s worth noting Stock Advisor’s total average return is 926% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 7, 2026.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool has a disclosure policy.
Recommended Articles
