The Boeing CompanyBANYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

⚠️Model Warnings

•Terminal value represents 116% of enterprise value. Valuation highly sensitive to long-term assumptions.

DCF Valuation Summary

Strong Sell

Fair Value: $82.09 per share(market-calibrated)

-64.3%

Upside to Fair Value

Current

$229.74

Pure Model

$66.34

Fair Value

$82.09

Bull Case

$104.38

Bear Case

$34.93

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

6.22%

Calibrated Growth

3.64%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $66.34.

What's Driving This Ratingfor BA

✓

CapEx already efficient

CapEx at 2.01% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is -3.03% — below the sector mature average of 13.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $12.8B (7.75% margin).

→

Moderate revenue growth

Analyst consensus projects 8.66% revenue growth, fading to 2.25% by Year 10. Revenue reaches $165.2B (vs $89.5B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $29.53/share (16.8x terminal FCF) while exit multiple gives $103.14/share (29.1x terminal FCF). The 18x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 2.25% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $229.74, the market implies 6.22% perpetual growth — 397bps above the model's 2.25%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 61.78% indicates efficient cash generation. FCF reaches $10.1B by Year 10 (6.14% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.14

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.63%

Cost of Debt

Pre-tax Cost of Debt4.87%

Tax Rate15.07%

After-tax Cost of Debt4.14%

Equity Weight (E/V)76.40%

Debt Weight (D/V)23.60%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (76.40% × 9.63%) + (23.60% × 4.14%)

= 8.33%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$97.2B	$122.3B	$137.4B	$151.2B	$165.2B
EBIT	-$2.9B	-$3.7B	-$4.2B	$4.1B	$12.8B
Tax	-$444M	-$558M	-$627M	$624M	$1.9B
NOPAT	-$2.5B	-$3.1B	-$3.5B	$3.5B	$10.9B
+ Depreciation	$2.1B	$2.7B	$3.0B	$3.3B	$3.6B
- Capex	$2.0B	$2.5B	$2.8B	$3.0B	$3.3B
- Δ NWC	$2.2B	$3.2B	$2.2B	$1.8B	$1.0B
Free Cash Flow	-$4.5B	-$6.1B	-$5.5B	$2.0B	$10.1B
Discount Factor	0.923	0.787	0.670	0.571	0.449
Present Value	-$4.2B	-$4.8B	-$3.7B	$1.1B	$4.6B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$10.1B

Terminal Growth Rate2.25%

WACC8.33%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$170.3B

PV of Terminal Value$76.5B

Exit Multiple Method

Year 10 EBITDA$16.4B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$295.3B

PV of Terminal Value$132.6B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs-$10.8B

PV of Terminal Value$76.5B

Enterprise Value$65.7B

(-) Net Debt$43.2B

Equity Value$22.5B

Shares Outstanding762M

Price per Share$29.53

Exit Multiple Method

PV of Projected FCFs-$10.8B

PV of Terminal Value$132.6B

Enterprise Value$121.8B

(-) Net Debt$43.2B

Equity Value$78.6B

Shares Outstanding762M

Price per Share$103.14

Pure Model Fair Value

$66.34

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
6.33%	$106.77	$114.98	$125.20	$138.27	$155.58
7.33%	$79.65	$84.83	$91.02	$98.57	$107.96
8.33%	$58.83	$62.30	$66.34	$71.10	$76.80
9.33%	$42.19	$44.62	$47.39	$50.58	$54.30
10.33%	$28.52	$30.28	$32.26	$34.50	$37.05

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$34.93

-84.8% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.42

Base Case

$66.34

-71.1% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 1.14

Bull Case

$104.38

-54.6% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 0.97

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth8.66%

Year 3 Revenue Growth10.21%

Year 5 Revenue Growth5.99%

Year 7 Revenue Growth4.50%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin-3.03%

Terminal EBIT Margin13.00%

Tax Rate15.07%

Historical Capex / Rev2.01%

NWC / Revenue28.14%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (Industrials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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