Key Stats for BA Stock
- Past week performance: -6.1%
- 52-week range: $177 to $254
- Valuation model target price: $849
- Implied upside: 356.2% over 4.2 years
Weigh Boeing’s turnaround odds with 5 years of analyst forecasts on TIKR (It’s free) >>>
A Strike Averted, but the 737 MAX Is Back Under Review
The Boeing Company (BA) fell about 6.1% over the past week as investors braced for a possible engineers’ strike. Shares then jumped 3.4% on Thursday to close near $192 after the union approved a new contract. The stock still trades about 24% below its 52-week high of $254. Relief has replaced worry, but only partly.
Boeing’s largest white-collar union, SPEEA, ratified a four-year deal before contracts expire on October 6. Its professional unit approved it with 67.6% of the vote, while the technical unit approved it with 53.5%. Terms include an immediate 10% raise and 4% annual increases. A walkout could have stalled engineering work on 737 MAX 10 and 777X certification.
The new worry is regulatory. The Federal Aviation Administration (FAA) is convening a review board on a 737 MAX flight software issue. During one specific go-around, or aborted landing, vertical navigation can disengage after pilots change the route. Boeing says the condition poses no immediate safety threat and is developing a permanent fix.
Q2 showed both progress and pain. Revenue reached $24.6 billion and backlog hit a record $715 billion, yet the core loss of $0.76 per share was wider than expected. CEO Kelly Ortberg said Boeing is building on “a sustained focus on safety, quality, and on-time performance.” If BA stock is going to reclaim its highs, the FAA review must end without slowing deliveries.
Check how analysts rate Boeing’s recovery and where their price targets sit (It’s free) >>>
A Turnaround Valuation Built on Earnings Coming Back From Zero
- Revenue Growth (CAGR): 8.3%
- Net Income Margin: 2.6%
- EPS Growth (CAGR): 21.4%
Based on these inputs, the model estimates a target price of $849, implying 356.2% total upside from the current share price of $186 and a 42.9% annualized return over the next 4.2 years.
A 42.9% annual return sits far above the 15% level that signals a deeply undervalued stock. However, that number says more about Boeing’s depressed earnings than about a bargain price. Shares trade near 172x forward earnings because profits are barely positive. When earnings start near zero, even a modest recovery produces huge percentage gains.
This is a turnaround and total return story. Boeing shares lost 16.9% over five years and 14.4% over the past year. The stock also remains far below where it traded before the 2019 737 MAX grounding. That long drawdown is exactly what the model expects to reverse.
Revenue growth of 8.3% looks reasonable as deliveries rise, especially with analysts forecasting 12.2% annual growth over the next two years. The 2.6% net income margin is conservative next to the 5.6% Boeing averaged over the past decade. Yet its operating margin over the last twelve months remains -5.4%. So margin repair, not sales growth, decides how much upside shows up.
Debt raises the stakes. Net debt of about $29.1 billion means cash flow must cover a heavy load before shareholders benefit. Investors should treat the $849 target as a full recovery scenario rather than a sure thing.
Adjust Boeing’s exit multiple and see how quickly the return changes (Free with TIKR) >>>
Boeing, Airbus and the Race to Win Back Airlines
Airbus (AIR) is Boeing’s only true rival in large jets. Boeing has been regaining ground, booking 103 net orders in January versus 49 for Airbus. July brought more wins, including a 100-jet 737 MAX order from SMBC Aviation Capital and a commitment from Riyadh Air for 28 787s. Even Airbus’s CEO has called Boeing’s recovery good for the industry.
Boeing’s record $715 billion backlog gives it years of visible demand. Still, its Commercial Airplanes unit posted a -2.7% operating margin on $11.8 billion of Q2 revenue. Airbus already earns money on its commercial jets, which is why investors value it on profits rather than recovery hopes. Closing that margin gap is the core of Boeing’s turnaround.
Defense rivals like Lockheed Martin (LMT) compete with Boeing for Pentagon budgets. Boeing’s Defense, Space & Security unit grew Q2 revenue to $7.5 billion, but its operating margin was -0.2%. It recently won the F-15 Eagle Crest contract, with a ceiling of $131.2 billion. That ceiling caps potential orders rather than guaranteeing revenue.
Trade policy affects both planemakers. The U.S. is slowing aircraft-part exports to China as leverage in trade talks. China ranks among the largest future jet buyers, so these tensions could shape who wins orders there.
Assess whether Boeing’s delivery recovery can validate Barclays’ 60% upside call >>>
What’s Driving BA Stock Going Forward?
Q3 results in late October are next. Investors will watch deliveries, cash flow and any update on 737 MAX production rates. Free cash flow, the cash left after capital spending, will show whether more deliveries are turning into money. A clean quarter would ease fears after the FAA headlines.
Certification is the key regulatory catalyst. FAA approval of the 737 MAX 10 was expected around October, based on reports from July. The software review could complicate that timeline. Certification lets Boeing deliver jets that customers already ordered.
Orders keep arriving. Ethiopian Airlines ordered eight 777-8 Freighters and two current 777 Freighters, with deliveries running from 2027 through 2035. Separately, the U.S. Air Force ordered four MH-139A Grey Wolf helicopters, its first full-rate production batch. These deals add backlog, although most of the freighter revenue lands years out.
With the SPEEA deal done, Boeing has labor peace with its engineers for four years. That removes a major execution risk while production ramps up. Going forward, the stock will track whether the FAA review ends quietly and margins finally turn positive.
Run Boeing’s bull, base, and bear cases in under 60 seconds (Free with TIKR) >>>
What is Boeing stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Boeing could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use. Value BA for free.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
