Mott Capital Management, LLC on The Boeing Company
Thesis
Mott Capital continues to own Boeing despite its poor relative performance and largely sideways share-price trend since 2022. Michael Kramer sees value in the manufacturer’s duopoly with Airbus and signs of gradual operating recovery. Deliveries of the 737 MAX are increasing, and the manager expects Boeing’s substantial aircraft order backlog eventually to support a higher share price. The thesis depends on the company executing the production and delivery recovery after a long period of disappointing returns.
“At some point, I think its massive order backlog should drive a higher stock price and make the wait pay off.”
Key risks
- The recovery in aircraft deliveries may continue to be slow.
- The shares have stagnated since 2022 despite the company’s order book.
- Execution shortfalls could delay conversion of Boeing’s backlog into earnings and share-price appreciation.