It's been a tough two years for Boeing (NYSE:BA), with the company hit first by the March 2019 grounding of the 737 Max after a pair of fatal accidents and more recently by the COVID-19 pandemic.

The company's shares are off 50% year to date, and Boeing's second-quarter results reminded investors there are no quick fixes for what ails it. Boeing lost $4.79 per share and bled through $5 billion in cash in the quarter.

There were some bright spots, including Boeing's resurgent defense business. And while the near-term is troubled, Boeing still has a strong portfolio of products and enjoys a global duopoly in commercial aerospace. There is still a lot for a long-term holder to like.

How long will the cleanup take? Here's a look at where Boeing stands now, with an eye toward where it will likely be five years from now.

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COVID-19 is hitting hard

We knew going into Boeing's second-quarter results that the pandemic would weigh on operations. Airlines are dealing with significant declines in travel demand by grounding planes and cutting expansion plans, eating into orders. It will likely take years for travel to return to pre-pandemic levels. With the airlines taking on billions in added debt to survive the crisis, it could be longer still before we see a surge in new plane orders.

New plane sales during the second quarter were anemic. Boeing also posted a $672 million loss in Boeing Global Services, which provides maintenance and support services on existing fleets. The division was an important part of the company's growth story two years ago and provided a key revenue boost after the 737 Max was grounded.

Boeing's widebody family in flight.

Image source: Boeing.

There's potentially good news embedded here for a long-term holder. It seems likely that airlines will lean heavily on their existing fleets as travel demand begins to return, and Global Services could help Boeing to get a share of that business even if new plane sales remain sluggish. This so-called aftermarket business tends to generate higher margins than new equipment.

But there are lingering risks, too. Boeing has built services in part by moving to vertically integrate its supply chain, shifting some avionics, power, and structure operations in-house. Historically vertical integration has worked well during an up-cycle in aerospace, but the higher fixed costs can be a cash and profit drain during bad times.

If air travel is slow to rebound, Boeing management might get a reminder of why they outsourced some of those businesses in the first place.

What about the backlog?

The long-term bull case for Boeing is built around the company's impressive 4,500 plane backlog. The backlog has fallen slightly this year as buyers have renegotiated some orders, but still provides the company with more than $300 billion in future revenue.

That book of business is a powerful safety net, but investors need to be cautious about putting too much stock in that number. Airlines and leasing companies are aggressively deferring orders to later dates due to the pandemic, which means that even if the backlog remains intact, Boeing could still be starved for sales for years to come.

Aerospace consultancy Teal Group said that during the last industry downturn from 2001 through 2003, Boeing saw a reduction in its backlog of only 500 planes -- a number that was more than accounted for by deliveries. There were only 80 cancellations recorded during a two-year period. Yet Boeing was forced to cut production rates by 30%.

Deferrals are even more likely this time around because the 737 Max issues have given customers significant leverage to renegotiate their orders. Southwest Airlines (NYSE:LUV), the largest single customer for the 737 Max, told investors it believes its contract with Boeing is up for renegotiation because Boeing has failed to deliver on the outlined terms.

Production rates are trending down

The commercial aerospace up-cycle that ended in 2020 lasted for 16 years. That's a remarkable run, as Teal says that prior to this surge, plane sales averaged a downturn every seven years dating back to the 1950s.

Boeing is bracing for an extended downturn, announcing significant layoffs in its commercial division and scaling back production plans. The 747, once Boeing's flagship, will be discontinued in 2020, and production of the 787 Dreamliner will fall to six per month in 2021. The debut of Boeing's new 777X has been pushed to 2022.

Boeing's 777 production line.

Image source: Boeing.

Boeing expects to have the 737 Max recertified before year's end, allowing it to begin to deliver the 400-plus planes parked on its lots during the grounding. That will help stem cash bleed, but with demand questionable, that inventory will take time to work through. Boeing is being cautious about further production.

Two years ago, Boeing had expected the 737 Max to end up as one of the best-selling planes of all time, with the company hoping to be producing more than 55 per month by now. Instead, it will build fewer than 80 planes in all of 2020, with a goal of ramping up production to 31 planes per month in 2022.

Where will Boeing be in five years?

For all Boeing's problems, I have little doubt that the company will survive to benefit from the next up-cycle. Absent some new 737 Max nightmare, the stock probably bottomed earlier this year and will likely trend higher from here.

But it could take five years, if not longer, for Boeing to iron out all of its issues, normalize production levels, and see sustained growth in its defense business. While I suspect an investment in Boeing today will likely be in the green five years from now, I also worry the stock is likely to trail the S&P 500 over that time.

I see better opportunities both in commercial aerospace and defense, and have no desire to put my money into Boeing shares to wait out the downturn. Boeing's stock is less expensive than it has been for years, but it is no bargain.