File today's space story under the lyric, "Second verse, same as the first."
It's been nearly six years now since President Trump (v1.0) announced plans to land Americans on the moon in 2024 under "Project Artemis." Delays and cost overruns in the development of Boeing's (BA 0.19%) Space Launch System (SLS), combined with concerns over the safety of the Lockheed Martin (LMT -0.21%)-built Orion space capsule SLS is supposed to carry, have already pushed that deadline back to 2026 -- halfway through the administration of President Trump (v2.0).
And now we know that NASA will miss that deadline, too.
An-ti-ci-pa-tion, NASA's making us wait
In 2022, if you recall, NASA successfully launched its Artemis I mission, the first step in America's return to the moon. On this mission, an SLS space rocket launched an uncrewed Orion space capsule on a path out past the moon and then back to Earth, where the capsule successfully reentered the atmosphere and landed in the ocean.
After landing, however, NASA became concerned about the charring and unexpected breakdown of some of the Avcoat heat shielding that protects Orion from the heat of reentry and pushed back its timeline for launching Artemis II (a crewed mission that will visit lunar orbit, but not land). NASA spent the last two years considering the issue and has finally made its decision: The Orion capsule is good to go, but Artemis II will not launch until 2026, and Artemis III, the mission that will finally land astronauts on the moon, will be pushed back into 2027.
Delays build on delays
Delaying Artemis II's launch date will add seven months to the timeline as the September 2025 launch date becomes an April 2026 launch date instead. Artemis III's delay will be even longer as its September 2026 target morphs into a launch in mid-2027 -- a delay of approximately nine months.
Importantly for investors, the delay will also push any revenues that Boeing and its space partners, which include not just Lockheed but Northrop Grumman, L3Harris -- basically, everybody who's anybody in space -- were hoping to receive from Project Artemis in 2025, into 2026, and any 2026 revenue into 2027.
Image source: Getty Images.
What this means for Boeing stock in 2025
So, how much money are we talking about? In a recent op-ed, billionaire Michael Bloomberg estimated that each time SLS launches on an Artemis mission, it costs U.S. taxpayers about $4 billion. (My own calculations put the cost closer to $4.1 billion, which, over the course of 20 anticipated SLS launches, makes Project Artemis an $82 billion cash cow for Boeing).
However, consider one thing at a time. Before Boeing can get anywhere near earning $82 billion from Artemis, it must first get Artemis II off the ground. Then Artemis III. Then Artemis IV, and so on. The first hit Boeing will take, therefore, is a $4 billion hit to estimated 2025 revenue.
Now, according to data from S&P Global Market Intelligence, analysts currently estimate that Boeing will bring in $86.6 billion in revenue next year. As investors, therefore, we can go ahead right now and mark that number down to $82.6 billion by subtracting Artemis II from the mix.
The implications for Boeing's 2025 profit are less clear. Firstly, because Boeing's defense, space, and security division is currently unprofitable. (It's lost $3.1 billion already this year and hasn't earned a full-year profit since 2021). That makes it hard to say whether having $4 billion less revenue in "space" will help or hurt profitability for the division. Secondly, Boeing might not even own its space division in 2025! The company is reportedly mulling a sale, and if "space" gets classified as a discontinued operation for Boeing, its results may get backed out of earnings from continuing operations.
What does appear clear is that postponing Artemis II won't do anything good for Boeing's cash flow. At last report, analysts were expecting Boeing to report nearly $1 billion in negative cash flow from operations next year. If the cash from Artemis II doesn't arrive on time, I'd expect that number to look even worse -- whether Boeing still owns the space division or not.
What this means for Boeing stock after 2025
In the longer term, delays to any Artemis launch -- be it Artemis II, Artemis III, or Artemis X -- pose even bigger risks to the health of Boeing's space business, whoever ends up owning it. As Bloomberg argued strongly in his op-ed, "spiraling" costs and an inability to actually launch any astronauts into space (so far) argue in favor of canceling the SLS program outright and replacing Boeing's space rocket with SpaceX's Starship -- which has been showing leaps and bounds in progress.
The longer it takes to get the Artemis launches done, the more time SpaceX has to make even more progress on Starship. The stronger the argument becomes for canceling SLS in favor of the SpaceX Starship.
If I were a betting man right now, I think I'd be betting big against Boeing -- and in favor of SpaceX.
