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Last update on 2024-06-04

Boeing (BA) - Piotroski F-Score Analysis for Year 2023 (Final Score: 6/9)

In-depth Piotroski F-Score analysis of Boeing (BA) for the year 2023 reveals a score of 6/9, evaluating profitability, liquidity, and efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 6

We're running Boeing (BA) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
0
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The analysis uses the Piotroski F-Score, ranging from 0 to 9, to evaluate Boeing (BA) based on nine criteria involving profitability, liquidity, and operating efficiency. Boeing scored a 6 on the scale, indicating a mixed financial health status. Notably, Boeing has positive Cash Flow from Operations and improved Return on Assets (ROA) in 2023, showing operational recovery. However, the company still struggles with negative Net Income, share dilution, and a declining current ratio, which highlights liquidity issues.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 6, Boeing shows signs of financial recovery and operational efficiency improvements but still faces significant challenges. Potential investors should be cautious and consider these mixed signals. It might be worth monitoring Boeing for further financial stabilization before making a long-term investment decision.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Boeing (BA)

Company has a positive net income?

Checking if Net Income for Boeing in 2023 is positive or negative is crucial because a positive Net Income indicates profitability, while a negative Net Income suggests losses.

Historical Net Income of Boeing (BA)

In 2023, Boeing reported a Net Income of -$2.222 billion, which is negative, earning it 0 points for this criterion. Over the last 20 years, Boeing has experienced significant volatility in its Net Income. While the company reported robust earnings prior to 2018, several challenges afterward, including the 737 MAX crisis, the COVID-19 pandemic, and supply chain disruptions, severely impacted its financial performance. Consequently, the negative Net Income in 2023 highlights continuing struggles in achieving financial recovery compared to its once-profitable years.

Company has a positive cash flow?

Cash Flow from Operations (CFO) is a crucial measure as it represents the cash generated or used by a company's core business operations. A positive CFO indicates that a company is able to generate sufficient cash to maintain and grow its operations, while a negative CFO could be a warning sign of potential liquidity issues.

Historical Operating Cash Flow of Boeing (BA)

For Boeing (BA), the Cash Flow from Operations in 2023 stands at $5.96 billion, which is positive. This translates to a score of 1 point for this criterion. Analyzing historical data: Since 2003, Boeing has mostly generated positive CFO except for the crisis periods in 2008, 2019, and 2020. The stark dips in CFO during these years were likely driven by external economic factors and operational challenges, such as the 737 MAX grounding in 2019 and the COVID-19 pandemic in 2020. A recovery to a positive cash flow indicates improved operational efficiency and recovery from previous crises. Therefore, seeing Boeing's CFO turn positive again in 2023 is a promising signal of financial health and operational recovery.

Return on Assets (ROA) are growing?

Return on Assets (ROA) measures a company's profitability in relation to its total assets, indicating how efficiently a company is using its assets to generate profit. It is key for evaluating Boeing's profitability trends.

Historical change in Return on Assets (ROA) of Boeing (BA)

In 2022, Boeing's ROA was -0.0358, indicating that the company wasn't using its assets efficiently to generate profits as it was losing approximately 3.58 cents for every dollar of assets. In 2023, the ROA improved to -0.0162, reflecting a decrease in losses as the company lost only 1.62 cents for every dollar of assets. While still negative, an improvement from -0.0358 to -0.0162 suggests that Boeing is heading in the right direction. However, when compared to the industry median ROA (which has historically ranged from 0.218 to 0.269 over the past 20 years), Boeing still lags significantly. This trend is a positive sign, adding 1 point to the Piotroski Score, but more substantial improvements are necessary for Boeing to reach industry parity.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income is a sign that a company is generating ample cash to cover its net earnings, demonstrating strong liquidity and efficient cash management. This metric is crucial for assessing the company's financial health and sustainability.

Historical accruals of Boeing (BA)

In 2023, Boeing's Operating Cash Flow stood at $5.96 billion, substantially higher than its Net Income of -$2.22 billion. This trend is notably positive for the company's liquidity position, indicating strong cash generation capabilities even in a year that ended in a net loss. Over the past 20 years, Boeing's Operating Cash Flow has varied widely, reaching as high as $15.32 billion in 2018 and plunging to -$18.41 billion in 2020 amid the pandemic and other operational challenges. Considering this long-term data, the recent operating cash flow recovery to $5.96 billion is particularly encouraging. However, continued monitoring is essential as the company navigates through these fluctuations.

Liquidity of Boeing (BA)

Leverage is declining?

The criterion assesses changes in financial leverage, a key indicator of a company’s solvency, signalizing the reliance on borrowed funds relative to equity.

Historical leverage of Boeing (BA)

The Leverage ratio for Boeing has decreased from 0.3779 in 2022 to 0.3438 in 2023. As a result, this criterion contributes +1 point to Boeing’s Piotroski Score, indicating an improvement in the company's solvency position. Historically, Boeing’s leverage took a steep increase during 2019 (0.1494) to 2020 (0.4068), attributed to the dual crises of the 737 Max grounding and COVID-19. The gradual decrease from 2021 onwards reflects a recovery phase, making the current decline a positive signal.

Current Ratio is growing?

Current ratio measures a company's ability to cover its short-term liabilities with its short-term assets. An increasing current ratio is generally positive.

Historical Current Ratio of Boeing (BA)

Boeing's current ratio decreased from 1.2162 in 2022 to 1.1403 in 2023. This is a negative indicator for Boeing, as the company now has less capability to cover its short-term liabilities with its short-term assets compared to the previous year. Historically, over the last 20 years, Boeing's current ratio has fluctuated, reaching a peak of 1.3937 in 2020 and a low of 0.7247 in 2004. Furthermore, the industry median current ratio was consistently higher than Boeing's, marking a concerning gap. Consequently, 0 points are attributed in this criteria as the current ratio has not improved.

Number of shares not diluted?

Examining changes in shares outstanding helps investors determine if a company is diluting its shares, which can affect shareholder value.

Historical outstanding shares of Boeing (BA)

Based on the available data, Boeing's outstanding shares increased from 594,578,313 in 2022 to 605,800,000 in 2023. This increase indicates a dilution of shares, which is generally considered negative for existing shareholders as it reduces their ownership stake. Over the past 20 years, Boeing has exhibited fluctuations in its outstanding shares, notably decreasing from a peak of 813,000,000 in 2004 to a low of 567,857,143 in 2019. However, the most recent trend shows an increase, implying potential dilution.

Operating of Boeing (BA)

Cross Margin is growing?

Gross Margin represents the percentage of revenue that exceeds the cost of goods sold, which is crucial for assessing manufacturing efficiency.

Historical gross margin of Boeing (BA)

Boeing's Gross Margin increased from 0.053 in 2022 to 0.0993 in 2023. This upward trend indicates better efficiency and cost control, which is positive. However, when compared to the industry median of 0.2484 in 2023, Boeing still lags significantly.

Asset Turnover Ratio is growing?

Asset Turnover measures a firm's efficiency in using its assets to generate sales. A higher ratio indicates superior performance.

Historical asset turnover ratio of Boeing (BA)

The Asset Turnover for Boeing (BA) has escalated from 0.4833 in 2022 to 0.5676 in 2023, marking a positive development. This steady rise indicates a revitalizing capacity to utilize its asset base efficiently in generating revenue. Notably, post-pandemic recovery traces are visible, presenting a promising comeback narrative. Furthermore, in historical retrospect, over the last two decades, Boeing's Asset Turnover was markedly higher, often surpassing the 0.9 mark, with peaks hitting above 1.1. Hence, while the current ratio is a positive increment, there's still considerable room to reach historical performance standards. This trend contributes a score of 1 point to Boeing's Piotroski F-score due to the improved Asset Turnover in 2023.


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