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Aerospace & Defense · #93 in the Retail 100

Boeing

BA
The war-driven defense buildup↑
Our rating
hold
12-month target
$196.33 +13.3%
Expected vs. S&P 500
-5.2 ptsSee the math
Next earnings
Jan 26In 82 days

Regulators allow 47 737s a month; Boeing says its own Renton wing shop is the holdup, and its plan reaches $10B of free cash flow only in 2029.

Summary

Boeing builds jets in a two-company market with Airbus, plus military aircraft and services. Commercial jets still lose money, defense is recovering from fixed-price losses, and services earn steady profits. In October Boeing said slow wing output delays a steady 737 pace of 47 a month to early 2027, and guided 2027 free cash flow (cash left after running the business and paying for capex, the spending on factories and tools) to about $3B, versus $5.6B analysts expected. The stock depends on the 737 reaching that pace.

$173.31
-$43.51 (-20.07%)Past year
What Boeing does

Boeing is one of two companies that build nearly all the world's large passenger jets, and a major U.S. defense contractor. Airlines order years ahead, so how fast Boeing builds, not demand, limits its sales.7,15

What it sells

  • Commercial Airplanes46% of revenue, FY2025

    737, 787, 777 and 767 jets for airlines and leasing firms. It lost $7.1B in 2025 as quality fixes and 777X delays cost billions.

  • Defense, Space & Security30% of revenue, FY2025

    Fighters, tankers, helicopters, satellites and weapons, mostly for the U.S. military. Fixed-price contracts caused a $5.4B loss in 2024.

  • Global Services23% of revenue, FY2025

    Spare parts, maintenance, training and upgrades for planes already flying. Boeing's steadiest profit, and the business that carries it while jets lose money.

Who buys it

Airlines and aircraft leasing companies around the world buy the jets; non-U.S. customers were 60% of commercial revenue in 2025. The U.S. government, including foreign military sales it arranges, was 35% of Boeing's total revenue.

Where you've seen it

If you've flown Southwest, you've flown Boeing: every one of its roughly 800 planes is a 737.

How the business makes money

The backstory

In January 2024 a door plug blew off an Alaska Airlines 737 MAX, and the FAA capped 737 output at 38 a month. Boeing burned $12.1B of operating cash that year and sold $18.2B of new shares. Kelly Ortberg, CEO since August 2024, chose to fix quality before speeding up: he bought back fuselage maker Spirit AeroSystems and is raising output in steps.

Boeing earns by delivering jets from a long backlog, then selling parts and services for decades. Until 737 and 787 output rises, services and defense carry the profit.1,2,5,7,9,10

  1. 1 · DemandOrder bookAirlines have ordered more jets than Boeing can build. Its commercial backlog tops 6,300 planes, roughly a decade at this year's pace.
  2. 2 · BottleneckBuild rateOutput, not demand, sets revenue. Each 737 step up waits on wings built in Renton and, for 52 a month, an FAA-certified Everett line.
  3. 3 · Cash engineDeliveriesAirlines pay the balance when jets are handed over. Slow output delays that cash while Boeing keeps paying workers and suppliers.
  4. 4 · Steady earnerServicesParts and maintenance for planes in service earn about 18 cents of operating profit per dollar of sales.
  5. 5 · Second engineDefenseDefense is recovering from fixed-price losses. Its backlog is about $101B, and two new fighter programs add years of work.
  6. 6 · PayoutDebt paydownCash goes to the balance sheet first. Boeing carries $45.9B of debt against $20.7B of cash.

Advantages

Half of a two-company market

Major advantage

Boeing's biggest advantage. Only Boeing and Airbus build large jets in volume, and Airbus has a backlog of over 9,200 planes, so airlines that need aircraft this decade have little choice but to wait for Boeing. That is why Boeing's backlog keeps setting records, and why fixing output turns straight into revenue.1,3,8

Parts and services for a huge fleet

Strong advantage

A steady earner rivals can't easily copy. Every Boeing jet flying needs parts, repairs and upgrades for decades, much of it from Boeing. Global Services earns an 18% operating margin, which keeps Boeing's total profit positive while commercial jets lose money.1,7

Next-generation U.S. fighters

Supporting

Important for the 2030s, not for next year's cash. Boeing won the Air Force's F-47 in 2025 and the Navy's F/A-XX in 2026. Management says the F-47 is cost-plus, meaning the government covers cost overruns, unlike the fixed-price deals that caused past losses.1,2,14

What's changing

The 737 ramp slips while new models win approval

Boeing is between production steps. The FAA cleared 47 737s a month in May, but output there isn't stable, and the step to 52 needs an Everett line still awaiting FAA certification. The 737-7 and 737-10 won certification this year. Boeing's cash targets assume the larger 777X is certified by mid-2027; the CFO said a later slip could cost roughly 10 to 15 deliveries next year.1,2,5,6,24

Competitors

Who else an investor would consider, and how they compare.

CompanyMarket valueWhat it doesCompared with Boeing
Boeingthis stock
$137.33B
Boeing is one of two companies that build nearly all the world's large passenger jets, and a major U.S. defense contractor. Airlines order years ahead, so how fast Boeing builds, not demand, limits its sales.
AirbusEADSY—Europe's planemaker and Boeing's only full-size rival, selling the A320 family against the 737.Airbus is ramping its A320 toward 75 a month; Boeing's next step is 52.8
COMACprivate—China's state-owned planemaker, selling its C919 narrowbody mostly to Chinese airlines.COMAC builds a few dozen C919s a year; Boeing builds that many 737s monthly.12
EmbraerERJ—Brazilian maker of smaller regional jets like the E195-E2, plus military planes.Embraer serves routes too small for a 737; it rarely competes head on.13
Lockheed MartinLMT—Defense-only contractor built around the F-35 fighter and missiles like the PAC-3.Lockheed earns steady defense profits; Boeing's defense margin is still recovering.11