Title: Friday POW! — Pick of the Week: Boeing (BA) — a turnaround by the numbers Source: Haymaker — Friday POW! Author: David Hay (The Haymaker Team; idea contributor Dan Bustamante) Date: 2026-MAR-13 (post dated MAR 13, 2026) URL: https://haymaker.substack.com/p/friday-pow-e1f Length: written post (PAID), no timestamps Note: Verbatim article text below (written newsletter — no spoken fillers to strip). Embedded images in the post (not saved): a Value Line financials sheet for Boeing and a 5-year BA price chart with overhead resistance line. The post ends with image-only "Buy List" and "Trims & Holds" lists whose tickers are NOT text-readable, so portfolio.json is unchanged. ================================================================ Introduction This week's pick has spent five years living under a cloud of bad headlines. Production failures, management turnover, labor strikes, and a major problem with one of its core machines; their situation was as bad as it sounds. For most investors, the name itself triggers an instinctive negative reaction, and that reaction, we'd argue, is precisely the opportunity. Key Points: - Bearish sentiment overhang masking a financial turnaround already underway - A true duopoly — only one major competitor of any consequence - $682B record backlog across all three segments - Free Cash Flow (FCF) turning positive — on track for $1-3B in 2026 - Per the Bloomberg consensus, FCF is projected to hit $6.7B in 2027 Because beneath the headlines is a turnaround that is already working. This week's POW!, as some of you might already have figured out, is… … Boeing, a company whose CEO Kelly Ortberg has quietly done what turnaround CEOs are supposed to do: stabilize operations, restore delivery cadence, and let the financial results begin to speak for themselves. The market hasn't fully listened yet. At around $214 (well off its January high of $254 and still down sharply from pre-crisis levels), we think it should. Closing out this introduction, here's a more comprehensive look at the financials, courtesy of Value Line. (Note: It is now trading closer to $210, a price we find meets our POW! criteria rather nicely). Okay, you're now primed for the larger case. Let's get to it. The Lazy "B" No More The USA-based member of the global duopoly in large jetliner production has long been known in Seattle, the city in which it was founded, as "The Lazy B". Some residents are old enough (ahem!) to remember — when it was on the brink of collapse, in the early 1970s — that billboards along I-5 read: "Will the last person leaving Seattle please turn off the lights?" Back then, the Emerald City (in case you forgot, home of the reigning Super Bowl champs) was pretty much a company town. This was before it became a high-technology mecca, birthing Microsoft and Amazon, along with a plethora of smaller tech winners, not to mention low-tech Costco. But back in 1971, when none of those existed, the cancellation of the SST program gravely wounded Boeing and the city. Over the years, Boeing (BA) has experienced several boom-and-bust cycles. Similarly, its reputation has soared at times, only to be trashed by quality-control issues. In the wake of Covid (an existential threat to its airline customer and, in turn, to BA itself) its over reliance on financial engineering vs aerospace engineering, reared its ugly head. Successive management teams appeared lazy indeed, if not downright incompetent. To stay on this side of the corporate grass, it was forced to raise around $25B of new equity (generally, at far lower prices than it had paid for its ill-advised buybacks, its main form of financial engineering). It also needed to sell $35B in bonds, slapping a heap of leverage on what had been a pristine balance sheet. For the above reasons, Team Haymaker has never once recommended BA's stock to our readers. That's been a good omission since its price today remains well below the 2017 high and near the median price roughly a decade ago. That's a long time to be dead in the water, especially in what has mostly been a roaring stock market. But our ace stock-picking friend, Dan Bustamante, has convinced us BA's fortunes are on the mend… and in a big way. We introduced Dan to you last week and, to reiterate, we feel he is a gifted judge of those equities likely to produce superior returns. He has agreed to share some of his favorite ideas with us, as well as opine on possible inclusions into the Haymaker portfolio that we "self-source". Turnarounds are always tricky, but we've been impressed by the moves the new CEO, Robert Ortberg, has made. These include cleaning up the balance sheet, elevating the stature of BA's engineers (the real ones), vastly improving quality control, and mending fences with the FAA. The fact that it has only one viable competitor is another unique and valuable attribute. One note of caution is that the war in Iran is, in our view, not likely to end in the next couple of days or weeks. If so, the longer it rages, the more pressure that will put on the airlines. In that event, it's certainly possible they will begin to cancel some of the hundreds of billions of orders they've given to the former Lazy B. Accordingly, if you have a negative view of current events in the Middle East (and we can't blame you if you do), either start with a small position or hold off altogether. The Bull Case: A Turnaround by the Numbers The heart of this thesis is financial, not sentimental. Start with the backlog: $682B in total, with all three segments at record levels. Commercial Airplanes account for the bulk of it, with 1,173 net orders in the year. But the story doesn't stop there. Defense, Space & Security carries an $85B backlog. Global Services adds another $30B. This is not a company guessing at future demand. It has nearly $700B of it locked in. (Note, the $567B backlog shown below is just for the Commercial Airplanes division.) Then there's the quarter that the market has mostly moved past. In Q4 2025, Boeing reported revenue of $23.9B, the highest quarterly total since 2018, up 57% year over year. CFO Jesus Malave put it plainly: free cash flow came in positive at $375M, driven by higher commercial deliveries and improved working capital. That number matters not because $375M is transformative for a company this size, but because it represents an inflection. Boeing has been cash flow-negative for years. That era is ending. The company is on track to generate $1-3 billion in positive FCF by end of 2026, hopefully, $6.7B next year, with a longer term target of $10B. February deliveries just hit their highest level since 2017. The operational recovery is not theoretical. It is showing up in the data. The Duopoly Nobody Wants to Talk About Here is the question worth pondering with: if you are Southwest Airlines, or Lufthansa, or any other major carrier that needs to buy aircraft, where do you go besides Boeing? Airbus. That's it. That's the list. Boeing and Airbus represent one of the most durable duopolies in the global economy. There is no third option at scale, no startup disrupting the wide-body market, no Chinese manufacturer with a certified product ready for Western airline fleets. (Brazil's Embraer has a minuscule 2% to 3% of the global market, and most of that is its regional jet business.) When sentiment turns negative on Boeing and the stock sells off — as it did when China halted orders last May, and again during the recent Iran-related correction — the orders don't disappear. They get redistributed to other customers on the same waiting list, or they come back, as China's did, with a potential 500-jet deal announced just last week. We're not buying a pre-revenue unicorn. We're buying a legacy franchise in a structurally protected business, in the middle of a recovery that has already begun. Valuation At roughly $214, Boeing trades at a meaningful discount to its January highs and to where the underlying business trajectory suggests it should be. The Wall Street consensus price target sits around $246 — approximately 15% above current levels — and that target was set before the latest delivery data. The more interesting valuation case is enterprise-level. Boeing carries significant debt from its years of negative cash flow, but as FCF turns positive and the balance sheet begins to repair, the P/E should expand alongside it. A company with a $682B backlog, record quarterly revenue, and a business protected by structural duopoly is not a distressed asset. The current price reflects the headlines. The backlog reflects the business. Technicals Zooming out, Boeing spent most of the past five years range-bound between roughly $140 and $250 — a range that makes intuitive sense given the operational turbulence it was navigating. The breakout above that range began last April, accelerated into the January earnings release, and then pulled back as the stock was priced for positive news ahead of the quarter. [Image: Five-Year Price Chart of BA with overhead resistance line displayed — Bloomberg] As you can see above, BA shares have broken above two-year resistance, but the big event would be moving definitively through $260. After that, $300 is reasonably attainable. The recent pullback, now compounded by the broader Iran-related market correction, has brought BA back to a technically interesting level. From the November low to the January high, the stock has retraced just over 50% — a level that Fibonacci traders watch closely as a potential base. The 200-day moving average, which the stock crossed above for the first time in over a year following earnings, is being tested. How it holds here matters. A stabilization at current levels sets up what we think is a move back toward $250+ over the next two to three quarters as FCF confirmation builds and the headline noise fades. Then, eventually, that $300 level comes into play. Conclusion What are we really buying here? A turnaround story with $682B in demand already locked in? A duopoly franchise trading at a discount to its own trajectory? A FCF inflection that the market has been waiting years to see? All three, and the entry point has just improved. Boeing will continue to generate negative headlines — that is the nature of the business and the media cycle around it. The 737 wiring issue this week is the latest example. A strike by its powerful SPEEA* union is another risk. But the question is not whether Boeing is a perfect company. It demonstrably isn't. The question is whether the turnaround is real, whether the backlog is real, and whether the duopoly moat is real. In our view, on all three counts, the answer is yes. At around $210, with the business inflecting and the sentiment still bearish, we think the gap between perception and reality is where the return lives. The Haymaker Team *Society of Professional Engineering Employees in Aerospace [Image-only Buy List and Trims & Holds list follow — tickers not text-readable; portfolio.json unchanged.] As a reminder, we're concerned about current market conditions for the reasons previously articulated. Accordingly, don't hesitate to act on the trims and, depending on your comfort (or discomfort) level, selling down even those that are rated "Hold" might be advisable. Erring on the side of caution right now, strikes as eminently reasonable.