CNBC’s Jim Cramer on Wednesday explained why he thinks Boeing is a buy even though it posted a third-quarter loss of more than $6 billion, saying there simply aren’t many competitors who can manufacture aircraft at scale.
“The worse Boeing’s financials might be, the better the buy, because as soon as this machinists strike is over and Boeing raises some money, it’ll be back on the road to profitability,” he said. “Do not get me wrong, this company is in awful shape — but only two companies on earth can make commercial aircraft at scale and Boeing is one of them. The demand for planes is off the charts, so they’ll be fine once they raise the cash.”
The plane manufacturer reported losses in its commercial and defense businesses, and the third quarter loss is its largest since 2020 when the pandemic inhibited air travel. Boeing has come under fire for quality issues with its planes for some time, namely a January incident where a door plug blew out during a commercial flight on a 737 Max 9 because key bolts hadn’t been installed correctly. Meanwhile, the company’s machinists have been on strike for over a month, hobbling production in factories on the West Coast and likely costing about $1 billion.
But even though Cramer called Boeing a “disaster,” he said it can be fixed. The company needs to cut out pieces of the business that are losing money and reach a deal with its machinists, he continued. If that happens, he said, the manufacturer could have “enough orders to feast on for years.” But he said he wouldn’t be so willing to bet on the company if there were a third major player in the game, noting that Boeing’s only significant competitor is Airbus.
Boeing also plans to raise as much as $25 billion in shares or debt over the next three years, and Cramer advised trying to get in on the company’s equity offering.
“It is vital that, if possible, you wait to buy this stock until they do the secondary offering to give you the ideal buying opportunity,” he said.
Boeing did not immediately respond to request for comment.
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