On Wednesday, Boeing (NYSE:BA) stock maintained its Buy rating from Stifel following the aerospace giant's announcement of a new CEO, Kelly Ortberg, who is set to take the helm next week. The company's second-quarter adjusted earnings per share (EPS) came in at a loss of $2.90, falling short of the consensus estimate of a $1.90 loss.
Free cash flow (FCF) burn was reported at $4.3 billion, in line with expectations. Boeing's total sales reached $16.9 billion, a figure that was lower than anticipated, while the backlog remained relatively stable at $516 billion.
The firm noted that the second-quarter performance was impacted by incremental charges, approximately $1 billion, on Boeing Defense, Space & Security (BDS) programs. However, these charges were anticipated and are not expected to significantly affect the company's share price.
The appointment of Ortberg, a former CEO of Rockwell Collins (NYSE:COL) and a retired executive from Raytheon (NYSE:RTN) Technologies (NYSE:RTX), is seen as a positive move due to his engineering background and fresh perspective as an outsider to Boeing.
Ortberg's addition to Boeing is anticipated to be a key positive catalyst for the company's shares. As he transitions into his new role, analysts are looking forward to a more comprehensive and holistic strategic plan from Ortberg in the coming months.
There is speculation that the current $10 billion FCF target for around 2026 may be revised, and a clearer production outlook is expected, which could restore confidence in the company's production capabilities.
Boeing's selection of a new CEO comes at a time when the company is navigating through various challenges, including those related to its defense programs. The market awaits further details on Ortberg's approach and strategy for steering Boeing forward.
As the new executive prepares to join the board and lead the company, investors and industry watchers will be closely monitoring any changes and updates to Boeing's financial targets and production forecasts.
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