What changed
$BA — Manufactures and sells commercial airplanes.
🎯 Q1 FY26 | Rev $22B | EPS $-0.20 vs $-0.67 🟢 | Margin 4.4%
💡 Consensus sees a slow recovery with FY EPS of -$0.39, but the market may be pricing in a faster return to profitability given the record $695B backlog. However, the Q1 FCF of -$1.5B and net debt of $35B suggest cash burn continues, and the 70% EPS beat is misleading because it's still a loss.
🏢 Business Quality: 6/10 | Valuation: fair
📉 Reward/Risk: Upside 15% to $247 (based on 1.5x book value, a typical cyclical peak) vs downside 20% to $172 (if cash burn continues and backlog conversion stalls). Ratio: 0.75x, unfavorable.
🔮 Catalyst: Q2 2026 earnings (late July): watch for operating cash flow turning positive and commercial delivery numbers. Failure signal: FCF remains negative or deliveries disappoint.
Also in play: $RTX $LMT $NOC $GD $LHX $TXT