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The original was posted on /r/wallstreetbets by /u/Agreeable_Ice_4774 on 2024-04-10 03:22:22.

I’ve been closely watching Boeing’s stock price as it has grinded lower, falling from the $200s down to the $170s. I expect this gradual decline to continue, even though I believe it’s a long-term buy.

One of the issues is that people tend to get very emotional when discussing Boeing, and that’s a problem in itself. But in the short to medium term, Boeing will also be suffering from some significant cash flow challenges:

1. Defense Business: Boeing is working through some very poor defense contracts. These will roll off in the coming years, but defense margins remain very poor in the meantime.
2. Commercial Business: Boeing has had to deal with poor contracts from the COVID-19 pandemic, unproductive production lines, and inventory issues. The news flow doesn’t help, and it’s possible they may not get back to full production until next year.
3. Services Business: This part of the business is doing fine, but how long can it support the two money-losing segments?

The underlying value is there, but these fundamental cash flow issues go beyond just the negative news. In the next 3-6 months, I believe Boeing is a bad buy.

The stock should benefit from a reset, but that will be difficult given Boeing’s semi-governmental status and the politics they have to manage. It’s essentially a value trap right now. I think it’s a screaming buy once they work through these problems, but not yet. Stay away!