Boeing (BA) receives Old York Operational Quality (B) Rating for fiscal year 2025

Mar 1

(B) | Industrials | Aerospace & Defense
By: Old York Financial
A Private Principal Research Report

the verdict

Old York Financial has assigned Boeing (BA) an Operational Quality (B) Rating. Boeing is a "Rebuilt Engine" that hasn't cleared its flight test yet. In 2025, revenue climbed to $89.5 Billion (+34% YoY) and deliveries hit 600 units, but the core business is still a "Clogged Pipe." It earns a (B) because its Commercial and Defense segments combined for over $7 Billion in operating losses. The 2025 "profit" was a mirage created by selling the Jeppesen crown jewel. For the Principal, Boeing is a survival story, not yet an efficiency story. The (B) rating reflects the massive $53 Billion debt load and the fact that the machine is still destroying value relative to its cost of capital.

the old york analysis

owner earnings: the liquidity "patch" We evaluate Boeing’s ability to generate cash without selling off the furniture. In 2025, the manufacturing process still required a "Cash Subsidy."

2025 Operating Cash Flow: $1.06 Billion
(-) Capital Expenditures: ($2.94 Billion)
(+) Depreciation & Amortization: $2.10 Billion (Estimated)
OLD YORK OWNER EARNINGS: $0.22 Billion

Analyst Note: While "Owner Earnings" technically turned positive, the Free Cash Flow was -$1.87 Billion. Boeing is essentially staying airborne by using the proceeds from its $24 Billion capital raise (late 2024) and the Jeppesen sale. The machine is not yet "Self-Fueling."

operational efficiency

ROIC (Return on Invested Capital): -3.9%
ROE (Return on Equity): 41.0% (Distorted by low equity)
Net Profit Margin: 2.5% (Inflated by asset sale)

Commercial Airplanes Margin: -17.1% (Dragged down by a $4.9B charge on the 777X).
Defense & Space Margin: -0.5% (Still struggling with fixed-price contract "Leaks").
Global Services Margin: 18.6% (The only clean cylinder in the engine).
Analyst Note (The Efficiency Gap): A -3.9% ROIC means Boeing is still "Burning Furniture" to keep the lights on. The 41% ROE is a mathematical anomaly because the company's total equity is a mere $5.4 Billion against $162 Billion in liabilities.

growth & market dominance

2025 Consolidated Revenue: $89.5 Billion.
The Backlog Fortress: $682 Billion (over 6,100 airplanes). This is the "Moat." The world needs planes, and there is only one other place to get them.
Production Ramp: The 737 MAX hit 38/month and received FAA clearance for 42/month in October. The "Assembly Line" is finally accelerating.
Spirit AeroSystems Re-Integration: By bringing the fuselage makers back in-house for $4.7 Billion, Boeing is trying to patch the "Quality Leak" at the source.

the fortress check

Total Assets: $168.2 Billion.
Cash & Marketable Securities: $29.4 Billion (A solid "Oxygen Tank").
Total Debt: $53.3 Billion (Down from $58B, but still a heavy "Anchor").
Solvency: S&P revised the outlook to Stable (BBB-) in late 2025. Boeing is no longer at risk of "Junk" status, but it is far from "Blue Chip" health.
Dividend: None. The Principal is still waiting for a return on capital.

final determination

Rating: Old York Operational Quality (B)

Classification: The Fragile Recovery.

Boeing is a (B) because it is still an "Operational Patient." You cannot give an (A) or even a (BBB) to a company that loses $7 Billion on its actual products and hides it with a subsidiary sale. However, the $682 Billion backlog and the production stabilization prevent a lower rating. It stays at (B) until it achieves a positive annual Free Cash Flow without "Financial Engineering."

Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager. This report is for informational purposes only.

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