Where Will Boeing Be in 3 Years?
How will things look for Boeing (NYSE: BA) in three years? Company management gave some insight on this question at its investor conference in early November. Taking that information at face value, the financial forecasting makes the stock look highly desirable. However, investing is rarely that simple, and Boeing has suffered a series of operational mishaps, bad luck, and poor decisions in recent years. So let's look deeper at where Boeing could be in a few years.
Management has decided to make free cash flow (FCF) its crucial metric to follow and be judged on. FCF is what's left over from net income after working capital requirements and capital expenditures have been taken out. It's the flow of cash in a year that can be used to make returns to investors (through dividends and share buybacks), fund acquisitions, or, as in Boeing's case, pay down debt.
FCF should be a crucial focus for Boeing investors because it's gone south in recent years. At the same time, Boeing's debt has ballooned, as it's had to deal with the grounding of the 737 MAX, travel restrictions rocking the airline industry, and a series of cost overruns on defense contracts.
Source Fool.com
