Jim Cramer says buy Boeing on Wednesday's decline — he's looking forward, not back

Boeing reported mixed third-quarter results, with revenue rising 30% to $23.27 billion, exceeding expectations, but a wider-than-anticipated loss per share of $7.47, primarily due to a larger-than-estimated $4.9 billion charge related to 777X program delays pushing certification to 2027. Despite the significant loss, the company achieved its first positive free cash flow since 2023, ahead of schedule, and saw commercial airplane deliveries increase by nearly 38%. This operational improvement, coupled with an authorized increase in 737 production rates and a robust $636 billion backlog, signals an improving outlook for future free cash flow generation, a key driver for the stock.

Analysis

Boeing reported Q3 revenue of $23.27 billion, a 30% year-over-year increase, exceeding analyst expectations of $21.97 billion. However, the company posted a wider-than-anticipated loss per share of $7.47, significantly missing the Street's $4.59 estimate, primarily due to a larger-than-expected $4.9 billion charge for 777X program delays, pushing first delivery to 2027.

Despite the significant loss, operational execution is improving, highlighted by the company's first positive free cash flow (FCF) since 2023, ahead of Q4 expectations. Commercial airplane deliveries surged nearly 38% year-over-year, reaching their highest quarterly total since 2018, and the FAA authorized a 737 production increase to 42 units per month.

Boeing's robust $636 billion backlog, with $600 billion contractual, provides substantial revenue visibility. Management's disciplined ramp-up of production, guided by KPIs, aims for sustained operational stability and FCF growth. This positive outlook, alongside benefits from U.S. trade policy, underpins analysts' reiterated "buy-equivalent" rating and $275 price target, looking past the Q3 loss.

Key Decisions for Investors

• Investors should monitor Boeing's disciplined production ramp-up and sustained free cash flow generation as key drivers for long-term valuation
• Closely track the 777X certification process and any potential further timeline adjustments, given its impact on future earnings and program risk
• Evaluate the company's efficiency in converting its substantial $636 billion backlog into deliveries and revenue, which will directly influence future financial performance
• Consider the long-term investment thesis supported by improving operational metrics, robust backlog, and strategic advantages from U.S. trade policy, despite short-term earnings volatility