Boeing’s $36.2 Billion Korean Air Deal Won’t Help Earnings Until the 2030s

Boeing has secured a $36.2 billion contract with Korean Air for a mix of 737 MAX, 787-10, and 777X aircraft, but the first deliveries won't occur until the early 2030s. Meanwhile, Lockheed Martin continues to post steady profits as Boeing struggles with cash flow issues, carrying a $600 million quarterly interest expense. Our analysts have compiled a list of the ten best stocks to buy, and unfortunately, Boeing does not make the cut.

Boeing confirmed the deal, which adds to its already substantial commercial backlog of 6,200 aircraft valued at $597 billion. The stock has seen a decline of 11.66% over the past month and 9.24% year to date, following CEO Kelly Ortberg's admission that stabilizing 737 MAX production is taking longer than anticipated. The contract's impact on earnings will not be felt until the free cash flow becomes more substantial, expected to be around $10 billion annually, once the backlog translates into deliveries.

The success of the early-2030s delivery window hinges on the certification of the 737-10, the launch of the 777X, and factory output. Boeing's CEO remains optimistic about a solid plan through 57, but acknowledges the need for additional work beyond that. Airbus's existing backlog of A320neo and A350 aircraft makes a switch from Boeing less likely.

Lockheed Martin continues to post steady profits, highlighting that scale alone does not guarantee earnings.