Why Jim Cramer isn't buying more Boeing despite its huge Navy contract win
Two main issues are holding him up.
Jim Cramer's hesitation to buy more Boeing shares despite its recent huge Navy contract win may seem counterintuitive, but it's rooted in his concerns about the company's current financial health and the competitive landscape. The $2.5 billion contract is undoubtedly a significant win for Boeing, but Cramer's focus is on the bigger picture, including the company's debt levels and cash flow generation.
Boeing's struggles with its 737 MAX and 787 programs have been well-documented, and these issues have taken a toll on the company's financials. With a significant amount of debt on its balance sheet, Cramer's likely worried about Boeing's ability to generate sufficient cash flow to service its obligations and invest in future growth initiatives. Additionally, the commercial aviation industry is highly competitive, and Boeing faces stiff competition from rival Airbus, which could potentially erode its market share and pricing power.
Looking ahead, investors will be closely watching Boeing's upcoming earnings report to gauge the company's progress in addressing its financial challenges and executing on its contract wins. Specifically, they'll be focused on Boeing's cash flow generation, debt reduction efforts, and any updates on its commercial aviation programs. If Boeing can demonstrate improvement in these areas, it may help alleviate Cramer's concerns and potentially lead to a more favorable outlook for the stock.
Originally reported by cnbc.com. FundingWire adds analysis for finance & markets readers.