The Boeing Company’s BA Commercial Airplanes business is showing signs of improving execution as production and deliveries increase. Boeing delivered 171 commercial aircraft during the second quarter. The 737 program also began transitioning toward a production rate of 47 aircraft per month in July.New aircraft programs could add another source of long-term growth. During the second quarter, the 777X received FAA approval to begin certification flight testing under TIA 4B, while Boeing delivered its first 787 Dreamliners to Riyadh Air. These programs expand Boeing’s future delivery opportunities beyond the existing 737 and 787 production ramp.Boeing’s growth opportunity is not limited to commercial aircraft. Its defense programs are moving into important stages. The U.S. Navy’s MQ-25A Stingray completed its first flight and was cleared for low-rate initial production, while Boeing also began low-rate initial production of the U.S. Air Force’s T-7A Red Hawk. These programs give Boeing additional exposure to defense modernization and next-generation aircraft demand.Global Services provides another source of demand through maintenance, training and other aviation services. The segment generated second-quarter revenues worth $5.3 billion and ended the quarter with a $33 billion backlog. Boeing also secured a U.S. Navy award for P-8A training systems and announced an agreement with Alaska Airlines to integrate its Virtual Airplane training solution.The combination of higher production, backlog conversion and improving cash generation could give Boeing greater financial flexibility over time.
Along with Boeing, few other companies also benefit from the same trend, as discussed below:Airbus EADSY: Airbus benefits from strong global demand for commercial aircraft and maintains a large aircraft backlog, giving it long-term exposure to fleet expansion and replacement demand.GE Aerospace GE: GE Aerospace benefits from commercial aircraft production through its engine business and has additional exposure to the growing installed aircraft base through aftermarket services.
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year improvement of 91.45% and 525.72%, respectively.
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In terms of valuation, BA’s forward 12-month price-to-sales (P/S) is 1.44X, a discount to the industry’s average of 2.26X.
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In the past six months, the company’s shares have lost 2.1% compared with the industry’s 11.7% decline.
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The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
