Boeing’s Market Value Is Now Less Than Elon Musk’s SpaceX

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An American Airlines Boeing 787-9 Dreamliner.

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Jon Raedle/Getty Images

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Boeing delivered a first-quarter earnings miss that sent shares lower, and pushed its market capitalization down. It now stands below $100 billion, which makes it worth less than Elon Musk’s SpaceX.

Maybe that ignominious milestone is a Buy signal for Boeing (ticker: BA) stock. Perhaps it can’t get much worse. Weary investors aren’t likely to jump back into Boeing shares based on the company’s relative value compared with SpaceX yet.

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Back in October 2021, SpaceX stock became worth $100 billion based on private-market transactions. That made the pioneer of reusable rockets the fourth-most-valuable aerospace & defense franchise on the globe, trailing at the time of Raytheon Technologies (RTX), Lockheed Martin (LMT), and Boeing. Airbus (AIR.France) was worth just a hair less that SpaceX in fifth place.

Now SpaceX is in third place, trailing Raytheon and Lockheed. Airbus and Boeing are neck and neck.

Of course, market capitalization is only one way to measure value. Enterprise value includes debt and cash levels. By that measure, Boeing is still in third place, ahead of SpaceX, but that isn’t exactly great news for Boeing shareholders.

Boeing had to take on billions in new debt following the worldwide grounding of its 737 MAX jet. The plane wasn’t flying commercially, or being delivered to customers, between March 2019 and November 2020 following two fatal crashes inside of five months.

Covid arrived after the MAX tragedy, leaving Boeing shares trading about 67% of their all-time high or about 9 times peak earnings per share of roughly $16 and roughly 6 times peak free cash flow of almost $14 billion.

That appears attractive, but when to buy a beaten-up stock is always a tough question for investors to answer.

Barron’s had a go, writing positively about Boeing shares back in August 2021. Since then shares have dropped 35%, while the S&P 500 and Dow Jones Industrial Average have both slipped 6%.

Barron’s suggested Boeing should develop a new plane and issue equity to pay down debt. Neither of those things has happened yet. What’s more, quality problems with the 787 and special charges in the company’s defense business have further eroded investor sentiment.

The Street still likes Boeing stock, though. Three quarters of analysts covering the company rate shares at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 58%. The average analyst price target is about $236, up almost 60% from recent levels.

To get Boeing stock higher, what investors probably need is good news, which would have more weight than a vote of confidence from the Street, a look at prior earnings, or even relative-valuation observations. Perhaps what would suffice is the resumption of 787 deliveries or improving free cash flow in the second half of 2022.

As for SpaceX, its $100 billion valuation is built on growth and disruption. SpaceX sales don’t approach Boeing’s yet, but Musk’s company plans to disrupt businesses such as high-speed internet. Cash flows will come in later years. Most speculative, high-growth stocks have been hammered amid rising interest rates and inflation. The Nasdaq Composite is down 20% year to date. Shares of Rocket Lab USA (RKLB), a much smaller version of SpaceX, are down about 42% year to date.

SpaceX, of course, doesn’t have a publicly traded price for investors to reference.

Write to Al Root at [email protected]


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