Boeing

IThe business

Boeing makes airliners and military aircraft and looks after both for decades. It has three reporting segments: Commercial Airplanes (BCA), Defense, Space and Security (BDS) and Global Services (BGS). In 2025 it had revenue of $89.5B, 34% more than in 2024, from 600 airplane deliveries, and a net profit of $2.2B that was entirely a gain from selling its Jeppesen navigation business for $10.55B.³⁵ Take out the $9.6B gain and net earnings were a loss of about $7.3B C (calculated).³ That one fact sets the tone for this page. The company is a recovery, and a recovery has two parts: what has been proven and what is still hope. I try to keep the two apart.

All figures are in US dollars. The shares trade on the New York Stock Exchange. Boeing’s year is the calendar year. The third-quarter report for 2026 was filed on 27 October, so it is the latest.⁶ The price is the close on 2 November, $175.40.¹²

Three businesses, three different jobs

Commercial Airplanes. This is the one that matters most and the one that has lost the money. It had revenue of $41.5B in 2025 and an operating loss of $7.1B, which includes a $4.9B charge on the 777X and a $0.4B charge on the 767.³ In the first nine months of 2026 it had revenue of $31.7B and a loss of $1.6B, a margin of minus 5.0% on 475 deliveries.⁴ The backlog is $611.8B, over 6,300 airplanes, up from $567.3B at the end of 2025.⁴ Most are single-aisle 737s, 4,537 of them, and about 39% of those are the 737-7 and 737-10, models that were not certified until this autumn.⁶ Revenue per airplane delivered in 2025 was $69M ($41.5B on 600). The backlog works out at $97M an airplane, because the widebodies and the 777X are in it C (calculated).³⁴

Defense, Space and Security. Revenue of $27.2B in 2025 and an operating loss of $0.1B, after a loss of $5.4B in 2024.³ In the first nine months of 2026 it had revenue of $23.0B, up 16%, and operating earnings of $710M, a 3.1% margin. That includes a $252M gain on selling an equity stake, so without it the margin is about 2.0% C (calculated).⁴⁶ Defense is usually a business that earns 9% to 11% at its peers. Boeing’s problem is fixed-price development contracts, which I come back to under Management and Risks.

Global Services. Parts, repair, upgrades and government support. Revenue of $20.9B in 2025, and $16.3B in nine months of 2026, with an 18.2% margin.³⁴ The reported 2025 operating earnings of $13.5B contain the $9.6B Jeppesen gain; without it they were about $3.9B C (calculated).³ Boeing sold the highest-margin, least capital-hungry part of this segment to raise cash. I come back to what that says.

The order book and the airplanes in it

Total backlog is $745B: $612B commercial, $101B defense and $33B services.⁴ Of the total, $693B is contractual and $53B is unobligated government funding.⁴ Boeing counts a commercial order only when no customer-controlled contingency is left, and it cut backlog by $17.8B in 2025 for orders that no longer passed that test, mostly 777X and 787, and by another $1.9B in the first nine months of 2026, plus $11.1B and $3.2B of cancellations.³⁶ Net firm orders over nine months of 2026 were about 686 airplanes against 475 delivered, a ratio of 1.4 C (calculated).⁶ The list of customers named in the third-quarter release includes Turkish Airlines, Ethiopian Airlines and Lufthansa.⁴

At 475 deliveries in nine months and a stated 737 rate of 42 to 47, the company is working off the book at about 640 airplanes a year. The 6,300 in backlog is then close to ten years of output. Customers are not short of orders to place. They are short of airplanes, and this is why Boeing’s problem is its own factory and not demand.⁶

What changed in the last two years

I list the events in order, because the price cannot be understood without them.

• 5 January 2024. A door plug detached from a 737-9 in flight and the airplane made an emergency landing. The FAA investigated the quality system, increased its oversight and said it would not approve production above 38 a month or new lines until Boeing met quality and safety standards.¹⁴³ Boeing slowed production and took $443M of customer concessions in 2024.³
• 8 August 2024. Kelly Ortberg, who had run Collins Aerospace, became chief executive.¹⁴
• 13 September to 4 November 2024. A 53-day strike by 30,000 machinists halted most commercial production. Operating cash flow for 2024 was minus $12.1B and free cash flow minus $14.3B.³⁵
• 30 October 2024. Boeing sold 129.4M new shares for $18.2B after costs, about $140 each, and 5.75M mandatory convertible preferred shares for $5.7B.¹⁴
• 29 May 2025. A non-prosecution agreement with the Justice Department over the two MAX crashes of 2018 and 2019. The last $689M went from escrow in September 2026.⁶
• 4 August to 13 November 2025. A 101-day strike by 3,200 machinists in St. Louis. It disrupted F/A-18, F-15, T-7A, MQ-25 and weapons.³
• Third quarter 2025. A $4.9B charge on the 777X after first delivery slipped to 2027.³
• October 2025. The FAA and Boeing agreed that the 737 could move to 42 a month.³
• 31 October and 8 December 2025. Boeing closed the Jeppesen sale and the $8.4B purchase of Spirit AeroSystems.³
• Second quarter 2026. The 737 began moving from 42 to 47 a month with the FAA’s concurrence.⁶
• 27 October 2026. Third-quarter results. The 737-7 and 737-10 had been certified, the Navy had picked Boeing for the F/A-XX fighter, and Boeing also said it was delaying planned 737 and 787 rate increases. The shares fell 10.7% that day, from $188.31 to $168.18.⁴⁶¹

The state of play now

The third quarter was better than the year before, which was a very low bar. Revenue was $24.2B, up 4%. The operating profit was $354M, which includes a $252M defense gain. Core operating earnings, Boeing’s own measure without pension credits, were $204M, a margin of 0.8%.⁴ Free cash flow was $464M. For nine months it is still minus $359M.⁴ Cash and short-term investments were $20.7B, debt $45.9B, and Boeing holds investment-grade ratings of BBB- at S&P and Fitch (outlook positive) and Baa3 at Moody’s.⁴⁶ Over the last four quarters free cash flow adds to about $16M C (calculated).⁵¹⁵⁴ That is the real distance travelled: from minus $14.3B in 2024 to about zero.

IIThe moat

The honest test of a durable business is what it did when conditions were bad. Boeing gives two answers, and they point in different directions.

The first is the market. Airlines need airplanes. Only two companies make large ones, and both are booked for most of a decade. Boeing’s own estimate is demand for about 43,600 new airplanes over twenty years.³ In 2019 and 2020 Boeing’s deliveries fell from 806 (2018) to 380 and then 157. In 2024 they fell to 348. Its customers waited, and in 2025 its deliveries were back to 600.^1612143 Net orders in 2026 are running at about 1.4 times deliveries C (calculated).⁶ No other maker of this kind of product could lose its way for six years and keep its order book.

The second is the company. From 2016 to 2018 the business made $33.1B of free cash flow. From 2019 to 2025 it used $37.9B C (calculated).⁸ Debt rose from $13.8B at the end of 2018 to $63.6B at the end of 2020.⁸ The two MAX crashes, the 2024 door plug, three labor stoppages across two years, charges of $4.9B on the 777X and $5.0B on defense development programs, and a cash call on shareholders of $24B in 2024 all happened at the same company.¹⁴³ The shares are 60% below the 2019 closing high. A business with a strong edge in execution does not do that. What it has is an edge in structure.

What does protect it

• A duopoly in a product that takes decades to build. The 10-K calls Boeing one of the two major makers of airplanes with 100 or more seats.³ Airbus’s backlog is 9,310 airplanes.⁹ A customer who wants a large airliner has two places to go, and both are booked for about a decade at today’s output C (calculated).⁶⁹
• An installed base. The cumulative deliveries of the 737 are 9,607 and of the 787 1,311.⁶ Those airplanes need parts, repair and upgrades for thirty years. That is Global Services, with an 18.2% margin.⁴ The segment reported $20.9B of revenue in 2025 and has $32.7B of backlog.³⁴
• Customer money in advance. Advances and progress billings were $67.5B at 30 September 2026, up from $59.4B at the end of 2025.⁴ Airlines fund a large part of the inventory. That is a strength while orders grow. It is a claim on Boeing if they stop, and it also flatters the cash flow: nine-month operating cash flow of $2.7B includes $8.1B from advances and used $6.7B for inventory.⁴
• A government customer. The defense backlog is $100.5B and the U.S. defense budget request for 2027 is $1,450B.⁴⁶ Defense work comes with a counterparty that does not go bankrupt, and with contracts that, when they are fixed-price, can cost Boeing real money.
• Regulators that keep the market closed. A new entrant must win FAA and European certification. That also works against Boeing: the FAA can set its rate, and has.¹⁴

Where it is thin

The duopoly protects the industry, not the company. If Boeing keeps making late and costly airplanes, Airbus gets more of the market, as it has: Airbus’s 9M deliveries were 547 and Boeing’s 475, and Airbus’s backlog is about 48% larger.⁹⁴ Customers have said so in orders, not in words: Boeing’s 2025 cancellations were $11.1B.³

The balance sheet has little cushion. Total equity is $6.6B at 30 September 2026, after being negative by $17.2B at the end of 2023.⁴⁸ Boeing has $45.9B of debt and rates BBB- at S&P, one notch above sub-investment grade.⁴⁶ That is a result of the burn. In a new shock, the company has a $10B undrawn credit line, $20.7B in cash and investments, and one covenant that requires at least $5.0B of liquidity.⁶¹⁷

The cycle matters too. Airline profits, forecast by IATA at $41B for 2026, are small next to a $745B order book.³ If a recession came, airlines would defer, and the advances from customers would fall as deliveries are pushed out. The last test, 2020, was a pandemic that cut Boeing deliveries to 157.¹²

IIIThe competitive advantage

The question here is what Boeing can do that its rival cannot. The rival is Airbus. In defense, the rivals are Lockheed Martin, Northrop Grumman and General Dynamics, none of which I have worked through here, so I will not compare them.

The table says the same thing from several directions. Airbus delivers more, has more on order, earns about 9% on its operations while Boeing earns about 1%, and has a plan to build 70 to 75 A320s a month by the end of 2027.⁹ Boeing’s plan is 47 a month for the 737 and then 52. Airbus’s free cash flow was also negative over nine months, by €1.3B, but Airbus guides for a full-year inflow of about €4.5B, which is a company guide and not a result.⁹ Boeing gives no such guide in its filings.

So where is Boeing’s edge? I can find three places and none is certain.

Widebody breadth. Boeing has a 787 backlog of 1,128 and 570 777X on order.⁶ It is also the one with the most trouble: first delivery was pushed to 2026 in 2024 and to 2027 in 2025, the engine supplier has a durability issue found in 2025, and Boeing holds $4.3B of work in process and $1.8B of unamortized tooling for it.³⁶ The program is at about break-even on gross margin, according to the 10-Q.⁶

Defense and services under one roof. The Navy chose Boeing for the F/A-XX fighter in the third quarter. It is not yet in backlog, pending the source-selection review.⁴ A sixth-generation fighter is a decades-long franchise if it goes well. After $5.0B of losses on five fixed-price programs in 2024, the key unknown is the contract type and price, which I cannot see.³

Vertical integration. The Spirit AeroSystems purchase closed on 8 December 2025 for $8.4B in all: $4.7B of Boeing stock, $2.6B of loans and advances settled and $0.9B of Spirit debt repaid.³ Spirit built the 737 fuselage, and the FAA looked at Spirit too after the January 2024 accident. Owning it puts the quality system in one set of hands. It also puts about 15,000 more people, and Spirit’s own problems, onto Boeing’s payroll.³ It is too soon to tell whether it will pay.

Where the rival is ahead

Output is the place Airbus is ahead and where Boeing’s edge is not. The 737 stood at 42 a month in the fourth quarter of 2025. Boeing began moving to 47 in the second quarter of 2026 and now expects to stabilize there in 2027.³⁶ The new 737 line, started at low rate in July 2026, still has to be production-certified by the FAA before its first delivery.⁶ The 787 is at 8 a month and the next increase is planned for December 2026 at the earliest.⁶ I count that as a competitor’s lead, not a fact about Boeing’s future.

IVManagement

Two people run the company. Kelly Ortberg has been president and chief executive since 8 August 2024. He came from Collins Aerospace, which he ran from December 2018 to February 2020, after a career at Rockwell Collins.¹⁴ Jay Malave has been chief financial officer since August 2025; he was Lockheed Martin’s chief financial officer from January 2022 to April 2025.³ The controller, Michael Cleary, is to retire in 2027 and will be succeeded by Ryan Shedd, who joins from Ernst & Young, after the 2026 annual report is filed.¹⁸ This is a new team, and its record is two years long. I treat it as one that has done a few good things and has not yet been tested by a full cycle.

Who controls it

Nobody does. Directors and executive officers as a group own less than 1% of the shares, and the proxy names BlackRock as a holder of more than 5%.¹⁰ The board has an independent chair.¹⁰ There is no founder or family. That means no one has the power to protect or to remove the management without a vote, and it also means shareholders’ interest is carried by the pay plan.

How they are paid, and what that pays them to do

Ortberg’s 2025 pay in the proxy was $23.6M: salary $1.5M, shares $7.9M, options $9.6M, annual bonus $3.9M and $0.7M of other items.¹⁰ His target total direct compensation is $22.0M.¹⁰ The pay is mostly in stock and options, which links him to the price and ties him to the rate and cash targets.

The annual bonus for 2025 used a single company score: 80% on free cash flow, core earnings per share and revenue, and 20% on operating goals. It paid 131% of target.¹⁰ Two details matter. For pay purposes the board adjusted free cash flow from minus $1.9B to minus $0.5B, and revenue from $89.5B to $89.8B, to reflect the Jeppesen sale and the Spirit purchase, and it adjusted core earnings per share down from $1.19 to minus $10.72, which removes the sale gain.¹⁰ I think the first and the last are fair and the net is a judgment, but a bonus at 131% in a year when free cash flow was minus $1.9B and the company lost money before the sale tells me the targets were set low after a bad year. The long-term awards from 2023 to 2025, which depended on three-year free cash flow, paid 0%.¹⁰ For 2026 to 2028, half of the performance units depend on cumulative free cash flow and half on total shareholder return against the S&P 500.¹⁰ That is a better design. Whether the stock or the cash measure is gamed by choice of timing, I cannot see.

The chief executive owns 9,606 shares outright and holds 131,338 stock units, which are mostly unvested awards.¹⁰ At $175.40 his direct shares are worth about $1.7M, against $23.6M of 2025 pay C (calculated). Most of his stake is in awards that have not vested, so I cannot call it his own money yet.

What they did with the money

Over a full cycle, this is the record that matters. From 2016 to 2019 Boeing spent $27.9B on buying back its own stock and $14.7B on dividends, a total of $42.6B C (calculated).⁸ In March 2020 it ended the buyback program, and it has paid no common dividend since 2020.³⁸ From 2019 to 2025 free cash flow was minus $37.9B, debt went from $13.8B at the end of 2018 to $63.6B at the end of 2020, and in October 2024 the company sold 129.4M new shares for $18.2B after costs, about $140 each, with $5.7B more of preferred shares.⁸¹⁴ The shares are now $175.40. The cash was returned when it was plentiful, at prices that were mostly higher, and raised when it was scarce. That is the opposite of what an owner would do, and it is the previous management’s record, not Ortberg’s.

The recent record is better, and it is still mixed. Boeing sold Jeppesen and related units, the part of Global Services least tied to the cycle, for $10.55B, about 35 times the roughly $0.3B a year of operating earnings the 10-Q shows it earned C (calculated), and used the cash to cut debt by $8.2B.³⁶ That is a good price for the asset and it is the right use of the money, but the sale also took away recurring earnings at a time when the rest of the company is not producing them. Then it paid $8.4B for Spirit, mostly in shares, to bring the 737 fuselage in house.³ The test of that is whether the 737 quality and cost record improves, and the 10-Q reports supply shortages that disrupted factory operations in the third quarter.⁶

The fixed-price defense programs are the other part of the record. They were bid and signed before Ortberg arrived, and he is paying for them.

Where Boeing is bidding now matters more than what it signed. The F/A-XX win is described as a selection pending source-selection review, with no value in backlog.⁴ If the contract type is fixed-price development, Boeing will have chosen to take the risk that cost it $5.0B in one year. If it is cost-plus, the risk sits with the Navy and the margin is lower. I do not know, and the answer will move my view of BDS more than any other fact in 2027.

VFinancials

Four things in Boeing’s statements do not mean what they first seem to. The 2025 profit came from a sale, not from operations. Free cash flow adds back stock that is issued to pay staff. The 2026 cash flow was helped by customers paying ahead of delivery. And the share count has been rising, which dilutes everything per share.

Revenue was $93.5B in 2016 and $89.5B in 2025, so the business is about the same size as it was ten years ago, and in between it earned $12.0B from operations in 2018 and lost $12.8B in 2020 and $10.7B in 2024.⁸ Earnings from operations of $4.3B in 2025 include the $9.6B gain. Without it the company lost $5.3B C (calculated). Deliveries show the same shape.

What an owner can really take out

Free cash flow is operating cash flow less capital spending. For Boeing, operating cash flow starts from net earnings and adds back the stock it issued to its staff. In 2025 that was $1,530M for the 401(k) match and $426M of share plans.³ The shares go to staff instead of cash, and owners pay for them through a larger share count. Over 2021 to 2025 the add-back was $10.2B. I treat it as cash spent. After that and the preferred dividends, owner cash over the five years was minus $24.4B, against free cash flow of minus $13.9B C (calculated).

The nine months of 2026 follow the same pattern. Free cash flow was minus $0.4B. Take away the stock pay and the preferred dividends and owner cash is minus $2.3B C (calculated). And operating cash flow of $2.7B used a swing of $8.1B in customer advances against $6.7B of inventory build. Advances are a loan from customers that reverses if deliveries slip.⁴

The balance sheet

Debt is $45.9B, down from $54.1B at the end of 2025 and from a peak of $63.6B at the end of 2020, with $20.7B of cash and investments.⁴⁸ Interest and debt expense was $1.8B in nine months, $0.3B less than a year before.⁴ The $10.55B received for Jeppesen and the cash raised in 2024 sat in investments, and they paid down the debt; operations did not.³⁴ That is the honest reading of the $8.2B reduction.

Equity is $6.6B positive, after being negative from 2019 to 2024.⁴⁸ The company carries $9.75B of valuation allowance against deferred tax assets, which means it has not yet counted on using its losses.³ Federal carryovers of $9.6B of tax value can shelter future profit.³ The mandatory convertible preferred stock turns into common shares on 15 October 2027, so it is not debt; I count it as shares.⁶

Dilution

Weighted diluted shares were 586M in 2018, 762M in 2025 and 792.4M outstanding on 20 October 2026.⁸⁶ With the preferred stock turned into common shares at today’s price, the count is 826M, 41% more than in 2018 C (calculated). Per-share results will lag company-wide results by that much, which I handle by putting the conversion shares into every case.

The price in numbers

VIValuation

First, how this goes badly wrong

Before any numbers, I ask what would hurt an owner most. I count three ways.

The ramp stalls, or breaks. Everything in the recovery depends on building 737s and 787s at higher rates and getting paid when they leave the factory. Boeing has just said in its own 10-Q that it is delaying planned rate increases for both, and that supplier shortages are disrupting the 777 and tanker lines into 2027.⁶ The FAA can stop a rate increase. Another safety event, a strike, or a weak supplier could do it again, and the company has $20.7B of cash against $45.9B of debt and investment-grade ratings one notch above junk.⁴⁶

The defense contracts repeat. Boeing lost $5.0B in 2024 on five fixed-price programs and added $0.3B more on the VC-25B in 2026.³⁶ A big new fixed-price program, even a chosen one, could cost the same again. My base value falls about $4 a share if $5B of cash goes on such a charge in 2028 to 2030 E (estimate), and more if the margin does not recover.

I pay a recovery price for a recovery that is not yet proven. At $175.40 the market asks for much more than I can build, and the shares fell 10.7% on 27 October on a quarter in which most items improved.¹⁴ A rate delay on a business whose value is in the future is expensive, because every year of delay is a year of cash not received and a year of risk not retired.

What an owner can really take out

Reported free cash flow over the last twelve months is about $16M. After $2.1B of stock pay and $0.35B of preferred dividends it is minus $2.4B, or minus $2.9 a share C (calculated).⁴⁵ That is the distance between the report and an owner’s cash. In my base case, cash before debt service is $1.2B in 2027 and $9.8B in 2030, and about $9 a share after about $2.2B of interest in 2030 E (estimate). The stock pay is already inside my numbers as a cost, so no part of my values depends on an add-back.

What I can’t judge

I cannot judge four things. The first is whether the 737 line can keep 47 and then 52 a month without another quality break; no filing can tell me that and the FAA must agree. The second is the margin of a 737-7 or 737-10, which have just been certified and which are about 39% of the backlog.⁶ The third is the 777X: final flight testing is to finish at the end of 2026, an engine durability fix is open, and the program is at about break-even.⁶ The fourth is F/A-XX and what else Boeing will bid at fixed prices. Where I cannot judge, I show a range, and the range is wide: $28 to $169.

How the cases are built

I build each case year by year in US dollars. Commercial revenue is airplanes delivered times revenue per airplane, starting at $67M, near the 2026 average, and rising 3%, 5% or 6% a year to 2030 as repriced backlog and widebodies come through: the backlog works out at $97M an airplane, far above current revenue per delivery.⁴ Defense revenue starts at $31.5B and services at $22.2B, each growing 3% to 5%. Each segment has its own margin. Operating earnings are after stock pay and after $2.1B a year of unallocated corporate cost. Cash is operating earnings plus depreciation of $2.35B, less cash tax, capital spending and a small working-capital build as revenue rises. Cash tax is 4% of taxable profit while $35B of shelter lasts (the $9.6B of federal tax value in the 10-K at 21%, less an allowance for credits I cannot separate) and 21% after.³ I discount at 9.5%: the 10-year Treasury yield of 4.91% on 2 November plus 4.6 points for a BBB- credit, a cyclical business and an execution record I cannot yet trust.⁷ After 2036 cash grows at 2.0%, 2.5% or 3.0%.

Three comparisons help. My base operating earnings for 2030 are $11.0B, below the $12.0B Boeing earned in 2018 on 806 deliveries, because the company is now bigger and carries more cost and a defense business that earns little.⁸ The base needs a Commercial Airplanes margin of 9.5% in 2030, against a loss of 5.0% in the first nine months of 2026 and a whole-company margin of 11.9% at the 2018 peak C (calculated).⁴⁸ And the base needs 800 deliveries a year in 2030, when the 737 is at 47 and the target after is 52.⁶

Put in plain words, the price needs 2030 operating earnings of about $17.5B, 58% above my base and 11% above my bull, and a business worth that for ever. It cannot come from deliveries alone: a Commercial Airplanes margin of 19% is not something the company has earned in this period. The odds are in the next sections.

The margin of safety, and the price against the range

My margin-of-safety price is $66. It is 70% of my base value. At that price an owner would have a 30% cushion against being wrong about the ramp and the margins, and the price would be 136% above my bear. I choose 70% because the largest inputs, the commercial margin and the defense contract risk, are the two I cannot see. At $175.40 the price is 85% above the base and 4% above the bull, and there is no margin of safety.

The price reflects a real debate, and the case for the market being right needs naming. It says that Boeing is one of two airliner makers and has a backlog nearly eight times its revenue; that it sold the shares in 2024 at a price near $140 and now trades higher; that the 737-7 and 737-10 certifications remove a long-standing risk; that the Navy chose it for the next fighter; and that margins on 47 to 52 737s a month and 10 to 14 787s would be far above today’s.⁴⁶ That is possible. My bull case includes much of it, and the price is still above the bull.

The next best use of the same dollar

The closest comparison I have worked through on this site is GE Vernova, another industrial with a long backlog and a cyclical equipment business, whose price is 34% above my base against Boeing’s 85%. In my work, Boeing’s base return from $175.40 to 2036 is 3.2% a year, below the 9.5% I require and below the 4.91% yield on a ten-year Treasury.⁷ The quality of the business and the quality of the price are two questions. Boeing’s business has a structural position that is hard to copy. The price I see does not pay for it with a margin.

The bull case needs many things at once, so I multiply them out. The 737 at 60 a month or more (about 25% likely, by my guess), 787 at 14 and the 777X ramping to rate (35%), a Commercial Airplanes margin of 12.5% (30%), a defense margin of 9% (30%), and no new large charge (50%). Multiplied as if independent that is under 1%; with overlap, perhaps 5% E (estimate). The price asks for more than the bull.

Where this could be in 5 and 10 years

For the base to be right at five years, deliveries have to be near 810 a year, Commercial Airplanes has to be earning about 10% and defense about 6.5%, and the value is then $130 a share in late 2031. That is -5.8% a year from today’s price, so an owner would depend on cash and the terminal value for the rest E (estimate).

VIIThe case for the price

What most people miss

Three things cut in Boeing’s favour and get little attention. First, the backlog is priced higher than the airplanes that leave the factory today. Revenue per delivery in nine months of 2026 was $67M, and the commercial backlog works out at $97M an airplane, partly because widebodies and the 777X are in it C (calculated).⁴ As older fixed-price orders roll off, revenue per airplane can rise without a single extra airplane being built. Second, it will pay little tax. The company carries $9.6B of federal tax value in carryovers, and it holds a $9.75B allowance against it because it has not yet had the profits to use it.³ Third, labor has been settled for now. The engineers’ union ratified two contracts on 1 October 2026 that run to 2030, after two strikes in two years.⁶³

The bull case

In plain words: Boeing is one of two makers of large airliners, with a backlog of 6,300 airplanes and $745B in total; its biggest development risks are clearing, with the 737-7 and 737-10 certified and the 777X in its last phase of flight tests; it has cut debt by $8.2B and holds investment-grade ratings; the Navy picked it for a sixth-generation fighter; and each step up in the 737 rate spreads fixed costs over more airplanes.⁴⁶ The chief executive said on 27 October that the certifications and the F/A-XX selection are important steps and that the company is not done.⁴ In the same release he said it will keep working on safety, quality and Lean.

I found no named analyst or fund manager whose published view on Boeing I could verify, and I checked no 13F filing, so the bull case here is management’s. I do not attribute a view to anyone who has not stated one.

Against reality

If Boeing gets the 737 to 52 a month, the 787 to 10 or more, and the 777X into service in 2027 without another charge, and if Commercial Airplanes earns about 10% and defense about 6.5%, the model gives a value near my base, $95 a share. The price of $175.40 is 85% above that. It is possible, and it needs much more than the plan. To be worth $175.40, the business would have to earn about $17.5B of operating earnings in 2030, against about $0.2B over the last twelve months without the sale gain and a best-ever $12.0B in 2018 C (calculated). Even my bull case, at $15.7B, is 10% short. Deliveries alone cannot do it: it would take about 1,609 airplanes a year, twice the 806 of the record year.

The distance is about margin, not demand. Today the business is paid for at 1.9 times revenue. At the margins in my base the same business is worth $95. I multiplied out the odds for my bull in Valuation: under 1% if the five conditions are independent, perhaps 5% with the overlap E (estimate). The price asks for more than the bull. The market may be right that the recovery goes further than I model; the 10.7% fall on 27 October shows how much of the price depends on the recovery dates.

What a 10x would take. Ten times $175.40 is $1,754 a share, a market value of about $1.45 trillion on 826M shares. At 20 times earnings that needs about $72B of net income, seven times the best year in Boeing’s history, $10.5B in 2018 C (calculated).⁸ At a net margin of 8% it is revenue of about $905B, 10 times the $89.5B of 2025. The highest Boeing has ever been worth, at the 2019 closing high of $440.62, was about $250B on 565M shares C (calculated).¹⁸ In ten years a tenfold move is 26% a year. Over the last ten years the shares rose 2.2% a year, from $140.75 to $175.40. A tenfold gain for a company this size, from this market value, is not plausible, and I do not model it.

Where I come down

What moved me was the order book, the certifications and the debt cut: $745B of backlog, two models cleared, $8.2B less debt. What did not move me was the price, since I cannot build a case in which cash flows justify $175.40, and the cash flow of the last twelve months has customer deposits and stock pay in it. What would raise my values is a Commercial Airplanes margin above 10% by 2030, a defense contract that is not fixed-price development, and a year in which free cash flow is positive without a rise in advances. Each extra point of Commercial Airplanes margin from 2029 is worth about $8 a share, and each 50 airplanes a year from 2029 about $4.

VIIIRisks, and what would change my view

The three ways this goes badly wrong are at the start of Valuation. These are the rest, and a test of each.

• Regulators and safety. The FAA must agree to each 737 rate step and to the new production line, and it has said no before.¹⁴⁶ Securities suits are pending, the court partly certified a class on 16 March 2026 and Boeing is appealing; fewer than five civil suits remain from the two MAX crashes, and investigations and suits followed the door plug accident.⁶ I cannot put odds on another event.
• Supply chain. In the third quarter a key 777 supplier’s parts shortage disrupted factory operations, and the 10-Q expects it to run through the first half of 2027, with abnormal costs expensed as they occur.⁶ Shortages also affect the KC-46A line.⁶ Spirit is now inside Boeing, so its problems are Boeing’s.
• Labor. The 2024 strike lasted 53 days and the 2025 St. Louis strike 101.³ The engineers’ contracts now run to 2030.⁶ About 72,000 employees, 40% of the workforce, are union members.³ I cannot judge what the next negotiation costs.
• Tariffs and trade. The United States has agreements with the United Kingdom, Japan, South Korea, Malaysia and the European Union that treat civil aircraft as tariff-free.³ Chinese customers paused accepting some deliveries in 2025 during talks, and the U.S.-China arrangement ran to 10 November 2026 when the annual report was written.³ Tariffs on aluminum, steel and copper raise input costs.³ After a February 2026 Supreme Court ruling, Boeing received about $420M of refunds on earlier tariffs in nine months.⁶ The net effect is not large in the numbers, and I cannot estimate the odds of a bad outcome with China.
• Defense funding. U.S. agencies are funded only to 11 December 2026, and the president’s fiscal 2027 request for defense is $1,450B, against $839B enacted for fiscal 2026.⁶ A budget stalemate or a change of priority could cut or delay programs. NASA’s request for 2027 is $6B lower.⁶
• The preferred stock and customer financing. The 5.75M preferred shares add 33.5M to 40.2M common shares in October 2027, and until then cost about $345M a year in dividends.⁶ Boeing also has $15.2B of airplane financing commitments.³ I count the first in my share count and treat the second as a risk not a claim.
• Pensions. Plans are $4.0B underfunded on a GAAP basis and retiree health is $2.0B; I deduct both.⁴

What a bad year looks like in the model

The surprise is how little a two-year recession costs if it ends: it takes $3 off the base, because the value sits in the long run. What matters more is what lasts. A Commercial Airplanes margin that stops at 7% costs $24, and a defense margin that never leaves 2% costs $21. The risk is not a bad year. It is a bad decade.