Boeing Faces Criminal Investigation and Operational Issues: What's Next?

🔍"Hard to handicap" the financial cost of the criminal investigation, but stock prices indicate a potential $4 billion market cap reduction.

⚖️Focus on the impact of the investigation on Boeing's production and negative headlines surrounding operational issues.

🔒Criminal penalties are unlikely to surpass previous settlements of $2.5 billion, but the situation requires time to be resolved.

✈️Boeing's backlog is at an all-time high, indicating continued demand for their commercial aircraft.

💰The valuation of Boeing is based on enterprise value to backlog or free cash flow multiples, and the company is expected to generate significant free cash flow.

What is the potential financial impact of the criminal investigation on Boeing?

—The financial cost is uncertain, but stock prices suggest a potential $4 billion market cap reduction. However, production expectations and negative headlines are also key factors to consider.

Is Boeing losing orders due to the ongoing issues?

—Boeing is not losing orders, and their backlog remains high. American recently placed a significant order for MAX-10s, contributing to an all-time high backlog.

Will the criminal investigation lead to more criminal prosecutions relating to crashes?

—The focus of the investigation is expected to be centered around the MAX-9, and it is unlikely to lead to more criminal prosecutions related to previous crashes.

How does the ongoing situation affect Boeing's production?

—The negative headlines and comments from the FAA and transportation authorities may impact production expectations. The erosion of the backlog could also be a significant factor.

How is Boeing's valuation determined?

—Boeing's valuation is based on enterprise value to backlog or free cash flow multiples. Despite the challenges, the company is expected to generate significant free cash flow.

00:02Boeing is facing operational issues and a criminal investigation by the Justice Department, causing a drop in stock prices.

00:08The potential financial cost of the investigation is uncertain, but stock prices suggest a potential $4 billion market cap reduction.

00:14Boeing's backlog remains high, indicating continued demand for their commercial aircraft.

01:01The investigation is expected to be centered around the MAX-9, and it is unlikely to lead to more criminal prosecutions related to previous crashes.

01:07Negative headlines and comments from authorities may impact Boeing's production expectations and backlog erosion.

01:47The valuation of Boeing is based on enterprise value to backlog or free cash flow multiples, with expectations of significant free cash flow.