BA shares are 50% off their peak values which were reached at the beginning of 2020. But they have been moving upwards over the last two months, beating the broad market in terms of returns. Its stock price has added about 40% since the beginning of October. This upside is closely related to management’s positive forecast of the Free Cash Flow (FCF). FCF was negative at -$4.4 billion in 2021, while this year it is expected to reach $1.5-2 billion on the positive side.  The company is planning to increase its cash generation to $10 billion by 2025. Boeing considers that its existing demand is strong enough to increase production to 50 commercial aircrafts a month, even if deliveries to China are excluded. The is a very bullish signal for BA stocks.

Wide-body aircrafts like Boeing 787 are expected to dominate the market, while its price could exceed narrow-bodied aircrafts by 200%. Boeing received orders to build 106 narrow-bodied aircrafts and 16 wide-body aircrafts in October for $7.9 billion. During the same month last year there were only ten orders, three of which were later canceled  so  the final net value of orders was $360 million. This year Boeing received orders worth $40.1 billion by the end of October, while the company had only $24.8 billion worth of orders for the same period last year. The number of orders improved dramatically because of the Boeing 737 MAX’s return to the sky.

On the negative side the company is facing a staggered schedule of production that is mostly linked to the last month of the quarter when most planes are completed on paper to present better quarterly reports. This year Boeing produced 363 commercial aircrafts for $25 billion up until the end of October compared to 268 aircrafts worth $20.5 billion for the same period last year. So, it is seemingly a positive upside. But, when we dive into details, we see that 51 aircrafts were produced in September, while only 35 were finished in October. So, the production schedule could be compared to a jigsaw with uneven figures.

During the last two years of the pandemic, Boeing started construction of many aircrafts that now need some minor alterations to claim the aircrafts ready for delivery. Thus, Wall Street is not exaggerating about the number of aircrafts produced. Quite the opposite, more stable production is needed to convince investors of the steady recovery path, that would boost aircraft maker stock prices to prepandemic levels.