BOEING CO (BA) stock intrinsic value fair value estimate & owner earnings analysis

Boeing builds commercial jetliners (737, 767, 777, 787), defense and space systems (KC-46A tanker, F-15, P-8, satellites, T-7A trainer) and aftermarket parts and services. We value it on the cash the business has actually produced after paying for stock-based pay and the capital spending needed to stay in business, and then subtract what it owes lenders. On that evidence all three cases come out below zero. That does not forecast a share price below zero; it says Boeing's proven cash generation does not cover roughly $30 billion of net obligations plus the cash still to be spent on program losses already booked, so any value in the shares rests on a profit recovery that has not yet been shown. Starting level. Cash produced before paying interest was about $3.3 billion in 2021, -$0.9 billion in 2022, $0.2 billion in 2023, -$6.2 billion in 2024 and $0.1 billion in 2025. We take the middle of 2021, 2022, 2023 and 2025, which is $0.14 billion a year, and leave out 2024 because the machinists' strike and the 737-9 door-plug grounding distorted it. We did not use 2016-2018 ($3.5 billion, $10.6 billion and $12.4 billion) because the business ran under conditions that no longer exist: before the 737 MAX grounding, before the FAA capped 737 output, and before the 2024 labor agreement. Working-capital swings are stripped out because they are large and reverse (for example, a $12.4 billion inventory build in 2024). Since 2020 Boeing has paid roughly $1.2-1.6 billion a year of its 401(k) contributions in newly issued shares; we treat that as a real cost, like stock pay. The $9.6 billion gain on the October 2025 sale of Jeppesen, ForeFlight and related units is not counted as earnings. Two adjustments to that level. First, we remove about $0.4 billion a year for the units sold (the buyer paid $10.55 billion; the filing does not say how much they earned, so this is our estimate). Second, we add $0.6 billion a year for production rates already reached or approved: the 737 line moved to 47 a month after FAA agreement (the company's July 2026 release says it has transitioned; the 10-K describes the plan) against 447 delivered in 2025, and the 787 is at 8 a month against 88 delivered. That is about 125 more aircraft a year. We credit $5 million of cash per extra aircraft, below the roughly $8 million implied by the 2025 improvement, because part of that improvement was one-off. Growth-path check: cash before interest improved by about $6.3 billion in 2025 (from -$6.2 billion to +$0.1 billion), mostly the end of the 2024 disruptions; the base case year one is $0.3 billion, an improvement of only $0.2 billion, so nothing is assumed to repeat. First-half 2026 fits this: revenue $46.8 billion (up 10.7%), operating cash flow $1.2 billion, capital spending $2.0 billion against $1.1 billion a year earlier; by our estimate cash before interest was roughly break-even. Two quarters is not enough to raise the starting level. Base case. $0.3 billion in year one, $0.34 billion a year after that, with no growth. The $715 billion backlog (6,200+ aircraft, reported July 2026) and the two-maker market for large jets are why we let this level continue rather than fade after year ten. We credit no further growth: the 777X (first delivery pushed to 2027; $4.9 billion of new losses in 2025 and $3.5 billion in 2024), the 737-7 and 737-10 (flight testing done, certification expected in 2026, deliveries 2027) and any margin recovery are not yet contracted profit. We treat the $5.3 billion of 777X and 767 losses booked in 2025 as cash still to be spent over 2026-2029 (the filing does not say how much has been paid, so this is our estimate; older charges are assumed spent). Business worth $5.6 billion, less $4.6 billion for those losses, less $30.3 billion owed = -$29.2 billion, or -$35.32 a share on 827 million shares. What is owed. Debt is $45.9 billion (down from $54.1 billion at the end of 2025, after the sale proceeds) against $20.0 billion of cash and investments; we keep $4.0 billion as operating cash and net the rest, add about $0.4 billion of remaining dividends on the 6% mandatory convertible preferred, and count that preferred as about 37 million shares converting in October 2027 (shares are 790.6 million plus that). The $230 million Spirit exchangeable notes are treated as debt. Maturities are $4.4 billion in 2027, $2.7 billion in 2028, $2.5 billion in 2029 and $5.3 billion in 2030. Average cash interest was about 4.9% of debt in 2025; we made no cost-of-debt adjustment. Ratings are BBB-/Baa3, the lowest investment grade step. Bull case: everything Boeing has under way works. The 737 reaches the 52 a month it ran at in 2018 and the 787 reaches 10 a month, adding $0.8 billion a year (about $1.0 billion of extra capital spending in year three), for $1.14 billion a year thereafter. The same $5.3 billion of booked losses applies. Business worth $17.0 billion, less $4.6 billion, less $30.3 billion = -$17.8 billion, or -$21.56 a share. It still does not assume a return to 2018 profitability. Bear case: the FAA limits output again (737 was held to 38 a month and 787 slowed below 5 a month in 2024-25), no rate benefit arrives, and the 777X slips again (an engine durability issue was found this year, and charges came in both 2024 and 2025). Starting level is -$0.26 billion a year, $1.5 billion of extra capital spending in each of the first two years, cash costs of both the 2024 and 2025 charges ($9.4 billion) plus another $4 billion, and the story ends after ten years. Business worth -$4.7 billion, cash still to be spent $11.6 billion, owed $30.3 billion = -$46.5 billion, or -$56.22 a share. A downgrade below investment grade would make refinancing costlier; we did not put a number on it. Change since our last view ($21.49, $81.13, $161.44). That view relied on management's $10 billion-a-year cash flow target and higher discount rates. We now count only cash flow that is secured or under way, discount at a flat 6%, subtract debt and the preferred directly, and charge the 401(k) share issuance. Real positives are included (the FAA approval of 47 a month, about $8 billion less debt, a record backlog) but they do not offset the lack of demonstrated profit. What could prove this wrong. Each extra $1 billion a year of lasting cash flow adds about $20 a share; about $1.8 billion more a year would bring the base case to zero, and a return toward 2017-2018 cash flow would put value far above these cases. Watch the 777X certification and 2027 first delivery without new charges, the fixed-price defense programs (losses of $0.8 billion in 2025 against $5.0 billion in 2024), and free cash flow after capital spending staying positive. As a cross-check, 2025 owner earnings before stock-pay deductions differ from net earnings plus non-cash items less maintenance capital spending by about $0.2 billion, which is the pension, long-term liability and tax lines we deliberately left in.