Boeing Stock Rated as Hold Due to Overvaluation

12 days ago

Parkev Tatevosian, CFA

"So, I've calculated a fair value for this business using my proprietary discounted cash flow valuation model of $161 per share. The current market price is $212 per share after the stock is down about 2% today. I see this business even after applying a margin of safety, I see this business being overvalued. On top of that, I've also decreased the company's beta by multiplying it by 0.85 because I see this business as being less risky than the beta suggests. Still, the stock looks overvalued and I'm not rating this business as a buy. In fact, to update my recommendation, I'm keeping Boeing stock rated as a hold."

The speaker assigns a fair value of $161 per share to Boeing versus its current trading price of $212, indicating the stock is overvalued. Despite improvements in manufacturing efficiency and reduced beta assumptions to reflect lower future risk, the overvaluation leads to a hold rating rather than a buy recommendation.

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