Why is The Boeing Company stock underperforming the market?

Boeing Co (NYSE: BA) faced significant financial challenges in the fourth quarter of 2024, with a 31% year-over-year revenue decline to $15.242 billion, falling short of the $16.174 billion consensus estimate. The company reported an adjusted operating loss of $4.042 billion, a stark contrast to the $90 million in earnings from the previous year, and an adjusted loss per share of $5.90, missing the expected $2.44 loss. Key factors contributing to these results included an IAM work stoppage, reduced deliveries, and $1.1 billion in pre-tax charges on the 777X and 767 programs. Deliveries dropped by 64%, with only 57 airplanes delivered. The Commercial Airplanes segment experienced a 55% revenue drop, while Defense, Space & Security revenue decreased by 20%. However, the Global Services segment saw a 6% revenue increase and an operating margin expansion to 19.5%. In response to these challenges, Boeing is implementing measures to stabilize its business, such as reaching agreements with IAM-represented teammates, restarting production of key aircraft models, and conducting a capital raise. The company aims to increase production of 737-MAX aircraft to 38 per month by late 2025 and stabilize the 787 program. Analysts have mixed sentiments, with Goldman Sachs and UBS maintaining Buy ratings and raising price targets to $213 and $217, respectively, while Wells Fargo maintained an Underweight rating with a raised price target to $103. Boeing's financial performance was further impacted by a $4.1 billion free cash outflow and a $3.45 billion operating cash outflow, though its debt decreased to $53.9 billion. Additionally, Boeing secured a $2.38 billion contract to build 15 KC-46A Pegasus tankers for the U.S. Air Force, which may positively impact future revenue.