What must happen for Boeing stock to get unstuck. The company needs, at least, to do its part

Boeing stock faces a tough road ahead until some of the headwinds facing the jetmaker — both those in and out of its control — can clear up. We're talking about three areas of uncertainty: Boeing's still-ambiguous re-entry into the Chinese market, questions about the U.S.-Iran war, and the company's own internal production rates. Boeing has become a wait-and-see story as management navigates these challenges, just over two years into CEO Kelly Ortberg's turnaround plan. The Club stock has been an underperformer — down about 9% year to date versus the S & P 500 's roughly 12.5% gain over the same stretch. China trade Expectations for major Boeing news out of this week's big summit between President Donald Trump and Chinese President Xi Jinping are low. Xi arrived in Washington on Wednesday evening. The two leaders held talks at the White House on Thursday, focusing on trade and artificial intelligence ahead of an evening state dinner. According to Reuters, hopes for new Boeing orders from China were sinking going into the talks. Instead, the company is said to be focused on trying to get China to finalize a commitment it made back in May to buy 200 jets. That deal was the first major Chinese order for the aircraft since 2017. However, in the absence of a firm order from a Chinese airline, it will be difficult for Boeing to get full credit for regaining a foothold in the Chinese market. One of the reasons the Club initially bought Boeing last September was because of the company's unique position as a bargaining chip that Trump could use in trade talks with countries that want to reduce deficits with the United States. The spring commitment from China regarding Boeing was a step in the right direction, but we would like to see more concrete follow-up. U.S.-Iran war The fiery rhetoric from Trump and Iranian President Masoud Pezeshkian in competing speeches at the United Nations this week did little to inspire hopes for a lasting peace between Washington and Tehran and a full reopening of the crucial Strait of Hormuz oil transport waterway. The conflict has led to soaring oil prices, which are viewed as a hurdle for the aviation industry. Boeing shares have been hurt on the thought that elevated fuel costs pressure airlines' margins, leaving less cash on deck to buy more planes. The stock's current downtrend began in early August, around the time that oil prices began another march higher. BA YTD mountain Boeing YTD On Thursday, Reuters reported the U.S. and Iran are in talks about a phased deal to end the seven-month-long war and reopen the strait. However, investors have seen this movie before. And with no announced deal, oil prices and bond yields remained firmly higher on the session, which pressured the overall stock market. West Texas Intermediate crude, the American benchmark, is up about 65% year to date. Turnaround challenges Adding to these geopolitical pressures, over which Boeing has little control, the company is still working on turning things around internally after years of mismanagement. Last Thursday was another black eye for Boeing, as management said at the Morgan Stanley Laguna conference that stabilization of its 737 Max production at 47 planes per month is taking longer than planned due to wing issues. "We actually produce all the wings in Renton for the Max line, and we just have not seen the flow improvements that we expected in the timeframe," Ortberg said at the conference. However, after a trip last week to Boeing's 737 manufacturing facility in Renton, Washington, Wolfe Research was encouraged by what analysts called Boeing's "underappreciated progress." In a Wednesday note to clients, Wolfe analysts acknowledged Ortberg's disappointing news but said, "That achievement does appear imminent (wings in Sep; final assembly in Oct), with process improvements in recent weeks making a difference." Bottom line Jim Cramer likes Boeing but admits that it's one of the stocks "we have to bide our time on." Simply put, he said during our September Monthly Meeting that investors "can't get all that excited" about Boeing until geopolitical tensions ease. The Club does expect Boeing to have pretty good cash flow next year, which is a positive to look forward to. Cash flow is what Wall Street cares most about at this stage of the turnaround— and if optimism about 737 Max manufacturing expressed by Wolfe analysts proves prescient, nothing helps cash flow better than producing more planes that can be delivered to clients. (Jim Cramer's Charitable Trust is long BA. See here for a full list of the stocks.) 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