BA – Market expectations are for Uniform ROA to rebound, but management may have concerns about air travel, 787 deliveries, and margins

• The Boeing Company (BA:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 40.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the pace of recovery in air travel, 787 delivery delays, and margin variability.
• Specifically, management may have concerns about the pace of recovery in air travel, the impact of 787 delivery delays on operations, and margins drags from their business transformation efforts. In addition, they may lack confidence in their ability to retain engineering talent, improve cash flow from the 777x program, and maintain their Boeing Defense, Space & Security (BDS) segment margins. Furthermore, they may be concerned about the strained relationship between the Chinese and US governments, environmental transition strategies that may impact freight, and expected variability in revenue and margins in Global Services.