Shortly after the opening bell, we will be buying 40 shares of Boeing at roughly $173.23. Following the trade, Jim Cramer's Charitable Trust will own 660 shares of BA, increasing its weighting in the portfolio to about 3% from 2.75%. We are picking up shares of Boeing, consistent with what we said last week after shares fell 10% in response to a disappointing earnings report. CEO Kelly Ortberg sank the stock by providing a multiyear free cash flow outlook below analyst and investor expectations, driven mostly by lower commercial-jet deliveries and increased capital expenditures to support the huge next-generation Navy fighter jet contract the company won in September. Heading into the print, analysts expected Boeing to deliver roughly $10 billion in free cash flow in 2028, according to FactSet. However, management pushed that timeline back a year to 2029. We are buying the sell-off for two reasons. The first is that this guidance reset has made expectations achievable and likely beatable as the company ramps up production at a conservative cadence. Second, Boeing should get some credit for having the…
We're buying the dip in a stock after an expectations reset
In short
The Charitable Trust purchased 40 shares of the aerospace manufacturer at roughly $173.23 apiece, raising the position's portfolio weighting to about 3%. Investor sentiment was dampened by reduced commercial deliveries and elevated capital expenditures tied to a recent Navy fighter jet contract. However, the reset provides long-awaited multiyear guidance while the company addresses past supply chain hurdles and repairs its corporate culture. Progress is further bolstered by Federal Aviation Administration certifications that will enable Boeing to address its massive order book.
Key points
- The trade lifts Boeing's overall weighting within the Charitable Trust portfolio from 2.7…: The trade lifts Boeing's overall weighting within the Charitable Trust portfolio from 2.75% to approximately 3%.
- Capital expenditures tied to a September Navy fighter jet contract contributed to lowered…: Capital expenditures tied to a September Navy fighter jet contract contributed to lowered near-term cash flow projections.
- FAA certification of the 737 Max 7 and Max 10 variants clears a crucial path for fulfilli…: FAA certification of the 737 Max 7 and Max 10 variants clears a crucial path for fulfilling aircraft delivery schedules.