Boeing stock (NYSE:BA) fell 7% on Tuesday, March 4th, due to concerns over the impact of new tariffs. The company’s reliance on imported components makes it particularly vulnerable to trade disruptions, which could lead to increased costs and reduced production efficiency.
Recent market volatility has been largely attributed to the Trump administration’s tariff policies and their potential ripple effects across the broader economic landscape. The implementation of these trade barriers has raised concerns about inflationary pressures and overall economic stability. Our comprehensive analysis delves into the market crash risk, offering an in-depth examination of how these tariffs might fundamentally reshape economic dynamics and investor sentiment.
At its current levels of around $160, BA looks very unattractive – making it a bad pick to buy at its current price. We believe there are several major concerns with BA stock, which makes it very unattractive given that its current valuation looks moderate.
We arrive at our conclusion by comparing the current valuation of BA stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Boeing along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very weak operating performance and financial condition, as detailed below. However, if you seek upside with less volatility than a single stock, consider the High-Quality portfolio, which has outperformed the S&P 500 and achieved returns greater than 91% since inception.
How does Boeing’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, BA stock is currently valued in line with the broader market.
• Boeing has a price-to-sales (P/S) ratio of 1.5 vs. a figure of 3.1 for the S&P 500
How have Boeing’s revenues grown over recent years?
Boeing’s Revenues have declined marginally over recent years.
• Boeing has seen its top line grow at an average rate of 3.1% over the last 3 years (vs. 9.8% for S&P 500)
• Its revenues have decreased 14% from $78 Bil to $67 Bil in the last 12 months (vs. change of 5.6% for S&P 500)
• Also, its quarterly revenues declined 31% to $15 Bil in the most recent quarter from $22 Bil a year ago (vs. 7.2% change for S&P 500)
How profitable is Boeing?
Boeing’s profit margins are considerably worse than most companies in the Trefis coverage universe. Amid increased economic uncertainty, see Kimberly-Clark Stock: Navigating Margin Growth And Market Challenges.
• Boeing’s Operating Income over the last four quarters was $-10.8 Bil, which represents a very poor Operating Margin of -16.3% (vs. 12.6% for S&P 500)
• Boeing’s Operating Cash Flow (OCF) over this period was $-12.1 Bil, pointing to a very poor OCF-to-Sales Ratio of -18.2% (vs. 14.4% for S&P 500)
Does Boeing look financially stable?
Boeing’s balance sheet looks weak.
• Boeing’s Debt figure was $54 Bil at the end of the most recent quarter, while its market capitalization is $117 Bil (as of 3/4/2025). This implies a poor Debt-to-Equity Ratio of 46.2% (vs. 19.7% for S&P 500). [Note: A lower Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $26 Bil of the $156 Bil in Total Assets for Boeing. This yields a moderate Cash-to-Assets Ratio of 7.6% (vs. 14.1% for S&P 500)
How resilient is BA stock during a downturn?
BA stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. Worried about the impact of a market crash on BA stock? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• BA stock fell 48.7% from a high of $225.96 on 17 January 2022 to $115.86 on 13 June 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 26 July 2023
• Since then, the stock has increased to a high of $264.27 on 17 December 2023 and currently trades at around $160
Covid Pandemic (2020)
• BA stock fell 71.9% from a high of $338.30 on 19 February 2020 to $95.01 on 22 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
Global Financial Crisis (2008)
• BA stock fell 71.1% from a high of $101.45 on 9 October 2007 to $29.36 on 3 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 7 June 2013
Putting all the pieces together: What it means for BA stock
In summary, Boeing’s performance across the parameters detailed above are as follows:
• Growth: Neutral
• Profitability: Extremely Weak
• Financial Stability: Weak
• Downturn Resilience: Very Weak
• Overall: Very Weak
This isn’t appropriately reflected in the stock’s moderate valuation which is why we think it is very unattractive, which supports our conclusion that BA is a bad stock to buy.
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