Have you ever watched a stock you really believe in get absolutely pummeled for months and wondered if your thesis was just dead wrong?
That’s pretty much where we’ve been with Boeing over the past year. What started as a seemingly reasonable position in one of the world’s two major commercial aircraft manufacturers turned into one of the most frustrating holdings in the portfolio. Yet sometimes the best opportunities hide inside the worst-looking charts, and that’s exactly why we decided to pull the trigger again this week.
Adding to Boeing at $188 – Here’s the Thinking
On Monday morning we picked up another 45 shares of Boeing around $188. Nothing dramatic, just a modest nibble, but it brings our total stake to 535 shares and pushes the weighting in the Charitable Trust back above 2.6%. More importantly, it lowers our average cost a little further at a time when the selling finally seems to be exhausting itself.
Let me be crystal clear – this isn’t some heroic “catching the falling knife” moment. We’ve been down this road before. When the stock cratered from $200 to the low $180s in November after yet another ugly charge on the 777X program, we sat on our hands for weeks. Why? Because sometimes the smartest trade is the one you don’t make.
The Falling Knife Phase Is (Probably) Over
Look, averaging down feels great when it works, but it can destroy you when the downtrend still has legs. Boeing spent most of November behaving exactly like a textbook falling knife – big gaps lower, no real bounces, heavy volume on the way down. Trying to be a hero in that environment is how you turn a 15% loss into a 40% hole.
But something changed last week. After touching $179, the stock put together three straight up days and reclaimed the $185 zone before giving a little back on Monday. Volume dried up on the pullback – classic sign that the panic selling is running out of gas. In my experience, that’s usually when it becomes reasonable to start legging back in.
“We didn’t keep adding to this position from $200 all the way down because the stock traded like a falling knife, and we wanted to see it stabilize before putting more money to work.”
The Core Thesis Hasn’t Changed – It’s Actually Getting Stronger
Let’s step back for a second. Why do we own Boeing in the first place?
It’s pretty simple: the commercial aerospace duopoly isn’t going anywhere. Airbus is production-constrained for years, global air travel demand keeps hitting new highs, and airlines are desperate for new, fuel-efficient planes. Boeing’s order backlog remains massive – over 5,600 commercial aircraft as of the latest count – and every 737 Max they push out the door eventually translates into real cash.
The market has spent the last two years fixating on the negatives – the door plug incident, the strike, defense program losses, endless 787 issues, you name it. Fair enough. Those are real problems. But the street seems to have priced in almost zero probability that management actually fixes any of this.
- 737 production is slowly climbing toward the mid-50s per month target
- The strike is over and workers are back building planes
- Travel demand remains incredibly strong (IATA just raised 2025 profit forecasts again)
- Free cash flow guidance for 2025-2026 keeps moving in the right direction
Perhaps the most interesting aspect? Wall Street’s expectations have been beaten down so low that even modest progress could trigger a major re-rating.
The Math on Production Ramp and Cash Flow
Here’s the part that keeps me up at night – in a good way.
Every incremental 737 delivered is insanely high-margin once you’re past the accounting block headaches. Management has said they expect to exit 2025 at 38 planes per month and push toward 50+ in 2026. That’s not some pie-in-the-sky number; the production system is already capable of it when labor and supply chain cooperate.
Rough math: moving from ~32 planes/month today to 50 represents about 225 additional deliveries per year. At roughly $10-12 million of cash contribution per plane (a conservative estimate once the program matures), you’re looking at $2.5-3 billion of incremental annual cash flow by 2027. That’s on top of whatever the 787 and 777X eventually contribute.
Add in the defense business stabilizing and maybe – just maybe – some debt paydown instead of endless dilution, and suddenly Boeing starts looking like one of the better risk/reward setups in the industrial space.
Risks? Of Course There Are Risks
I’d be lying if I said this was a slam dunk. Regulatory scrutiny remains intense. Another major quality incident could set things back years. The balance sheet is still ugly. And yes, the stock could absolutely retest the lows if we get a recession scare in 2025.
But here’s what I’ve learned after decades of doing this: the best investments often look scariest when the turnaround is just beginning. Think Apple in 1997, Ford in 2009, or even Disney after the Iger comeback. The crowd is usually maximum pessimistic right before things start getting better.
We’re not betting the farm here. This is a 2.6% position that we’re slowly averaging down as evidence builds that the worst is behind us. If we’re wrong, the damage is contained. If we’re right – and production really does hit those targets – the upside from the mid-$180s could be substantial over a multi-year horizon.
The Bottom Line
Sometimes patience gets rewarded in the most unexpected ways. Boeing has been a painful lesson in how quickly sentiment can sour on even the bluest of blue-chip names. But the combination of a stabilizing chart, improving fundamentals, and bombed-out expectations makes this one of those setups where putting a little more capital to work feels right.
We’ll keep watching the production numbers like hawks. Another leg lower and we’ll reassess. But for now, the risk/reward of adding at $188 feels a lot better than it did at $250 – or even $200 just a few weeks ago.
In investing, as in life, sometimes the best move is simply to stay in your seat when everyone else is running for the exits.
Disclosure: Jim Cramer’s Charitable Trust owns shares of BA.
