Should Boeing Stock Be in Your Portfolio Ahead of Q2 Earnings Release?

The Boeing Company BA is scheduled to release second-quarter 2025 results on July 29, 2025, before market open.  The Zacks Consensus Estimate for revenues is pegged at $21.93 billion, implying a 30% improvement from the year-ago quarter's reported figure. The consensus mark for earnings is pegged at a loss of $1.47 per share, suggesting an improvement from a loss of $2.90 in the prior-year quarter. However, the bottom-line estimate deteriorated significantly in the past 60 days.Image Source: Zacks Investment ResearchBoeing’s earnings missed the Zacks Consensus Estimate in three of the trailing four quarters and beat the same in one, the average negative surprise being 19.51%.Image Source: Zacks Investment ResearchEarnings WhispersOur proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.BA has a Zacks Rank #3 and an Earnings ESP of 0.00% at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Key Factors to ConsiderSolid Expectations From Global Services BusinessSteadily increasing global commercial air travel, resulting in increased fleet utilization, must have bolstered commercial jet services sales volume. This, along with increased government jet service volume backed by rising need for defense-related aftermarket aircraft support, maintenance, and upgrade, can be projected to have lifted Boeing Global Services’ (“BGS”) unit’s top-line performance in the second quarter. Favorable operating margins generated from both government and commercial services businesses are expected to have boosted the BGS unit’s earnings from operations in the soon-to-be-reported quarter. The Zacks Consensus Estimate for the unit’s revenues is pegged at $5,161.3 million, indicating an improvement of 5.6% from the year-ago quarter’s reported number. The consensus mark for earnings is pinned at $942 million, indicating solid growth of 8.3% year over year.Will Impressive Commercial & Defense Deliveries Boost Q1 Results?Boeing’s second-quarter deliveries reflect a 63% improvement in commercial shipments from the year-ago quarter’s reported figure. Also, its defense shipments surged 60% year over year.Such improved deliveries can be projected to have bolstered both top and bottom-line performances of Boeing’s commercial and defense business segments, in the second quarter. The consensus estimate for Boeing’s commercial airplanes business segment’s top line is pegged at $9,948.3 million, implying a 65.7% surge from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for the defense unit’s revenues is pegged at $6,398.5 million, indicating a rise of 6.3% year over year.Overall PictureImpressive sales growth expectation from all three of its business segments is likely to have bolstered Boeing’s overall second-quarter top-line performance. On the bottom-line front, solid revenue growth must have lifted up Boeing’s second-quarter earnings. However, the company might have faced higher input costs in relation to the import tariffs slapped by the U.S. government over the past few months on the majority of its trading nations, particularly the 25% tariff imposed on imports of aluminum and steel that are widely used in aircraft production. This higher input cost, along with the impact of supply chain disruptions impacting global trade, as well as any residual impact from the November 2024 labor strike-induced production disruption, might have put some downward pressure on BA’s quarterly earnings.Price Performance & ValuationBoeing’s shares, has exhibited an upward trend, gaining a notable percentage over the past three months. Specifically, the stock has surged a solid 29.6% in the past three months, outperforming the Zacks aerospace-defense industry’s growth of 21.4%.BA’s Three-Month PerformanceImage Source: Zacks Investment ResearchOther notable stocks from the same industry have also gained substantially over the past three months, but underperformed BA. Shares of General Dynamics GD and Embraer ERJ have rallied 9.6% and 9.2%, respectively, over the past three months.  From a valuation perspective, Boeing is trading at a discount compared to its industry. Currently, BA is trading at 1.88X forward 12-month price/sales, which is lower than the industry’s forward 12-month price/sales of 2.28X. However, the stock is trading higher than its five-year median of 1.42.Price-to-Sales (forward 12 Months)Image Source: Zacks Investment ResearchLike Boeing, its industry peers are also currently trading at a discount to the industry. While the forward 12-month price/sales multiple for Embraer is 1.13, the same for General Dynamics is 1.55.Investment ThesisThe steadily rising demand for air travel and the replacement of aging fleets are driving the need for new jets and aftermarket services, which play the role of key growth drivers for America’s largest commercial aircraft manufacturer — Boeing. However, persistent supply-chain issues, particularly those arising from a shortage of aircraft parts, continue to affect the global aviation industry. This, in turn, poses a significant risk for aerospace sector players, such as Boeing, Embraer and General Dynamics.Moreover, a mix of issues—such as long-standing quality problems with the 737 Max and other programs, lingering effects of last year’s labor strike disruptions, cost overruns on key projects, supply chain challenges, and the planned acquisition of Spirit AeroSystems—have likely contributed to Boeing’s high debt levels. This is evident from its higher long-term debt-to-capital ratio compared to its industry.BA’s Long-Term Debt-to-Capital Image Source: Zacks Investment ResearchShould You Buy or Sell BA Now?Boeing likely delivered a strong revenue performance in the second quarter, backed by robust commercial and defense deliveries and steady growth in its services segment. However, investors interested in this stock should wait until next Tuesday, given the company’s lack of Earnings ESP surprise potential, recent downward revisions in its earnings estimate and elevated debt levels. While BA may not be ideal for fresh entry ahead of the upcoming release, existing shareholders can consider retaining the stock, given its discounted valuation, recent share price momentum and favorable industry dynamics. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Boeing Company (BA): Free Stock Analysis Report General Dynamics Corporation (GD): Free Stock Analysis Report Embraer-Empresa Brasileira de Aeronautica (ERJ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks