The Boeing Company BA

Key data

The business

Boeing is one of two companies on earth that builds large commercial jets, and its order book sits north of $715 billion, roughly 5,900 aircraft plus defense work, years of demand already sold. The money comes three ways: commercial airplanes (BCA), defense and space (BDS), and global services (BGS), the last being the parts, maintenance and training the installed fleet buys for decades after delivery, the highest-margin and steadiest line in the house. The whole recovery rests on one machine, the 737 MAX, whose cadence the regulator capped at 38 a month after an Alaska Airlines fuselage panel blew out mid-flight. In December 2025 Boeing bought back Spirit AeroSystems, the supplier that builds those fuselages, to own the quality problem at its source rather than inspect it after the fact. The moat is the duopoly and the backlog; the risk is that Boeing is the only company that can hurt Boeing.

The numbers

The quarter-to-quarter story is a company clawing toward breakeven, interrupted by one enormous one-off. Read the five in order.

The $8.2 billion in Q4 2025 is not the airplane business turning; it is the gain on selling the Digital Aviation Solutions software unit to Thoma Bravo, which alone dragged fiscal 2025 to its first annual profit since 2018. Strip it and Boeing is still losing money every quarter, but the losses are shrinking fast: from a $5.3 billion hole in Q3 2025 to $444 million now, on revenue climbing 8% year over year. Q2 2026 lost $444 million where analysts expected roughly breakeven, so the market is no longer grading on a curve.

Five straight years of losses through 2024, then a profit built on a divestiture. That is the record you are paying for. The industrials question is whether operating leverage is actually returning, and the operating line says it is beginning to.

Two consecutive quarters of positive operating income on rising revenue is the first honest sign the factory is earning its keep again. The compounding math: today's $167.8 billion market value is 26 times the $8.09 a share the Street pencils for 2028. The recovery, in other words, is not a secret; it is largely in the price. What the market may still underweight is 2029, where consensus jumps to $12.18 a share, about 17 times, if the rate holds and defense stops bleeding. The single print that settles it is the 737 monthly delivery rate crossing and staying above 42.

Management

Kelly Ortberg, brought in August 2024, is running an execution turnaround, not a growth story, and the balance sheet shows it. The August 28 8-K renewed Boeing's bank credit lines, so the backstop worth watching held, and the company went further: long-term debt fell from $53.8 billion at year-end to $45.6 billion by June, real deleveraging rather than a refinance. Boeing pays no dividend and buys back no stock, correctly, until cash generation is durable. Insiders sold about $5.3 million over the year against $0.9 million of token buys, led by three officer sales in February; plan status is not disclosed, so read them as routine compensation rather than a signal. The reabsorption of Spirit is the tell: Ortberg would rather own the hardest part of the supply chain than keep apologizing for it.

How it fails or surprises you

Another quality escape. One more loose bolt, cracked fuselage or grounding event and the FAA freezes the 737 rate below 38, pushing cash-flow recovery out a year and reopening the debt question. The tell is the monthly delivery cadence stalling; watch it every month, not every quarter.

The rate breaks free (right tail). If the 737 clears 42 a month and the 787 returns to 7, free cash flow can snap back toward pre-crisis levels. The market is paying for a company near breakeven, not one throwing off cash; a clean run of deliveries reveals it first, and the stock re-rates on cash rather than hope.

Defense keeps charging. The fact this read explains least is that Boeing still loses money on $24.6 billion revenue quarters, and the culprit is fixed-price BDS programs taking reach-forward charges. If those charges keep coming, breakeven slips regardless of how many 737s ship, and the whole thesis of returning operating leverage is wrong.

Closing thoughts

The recovery is largely priced, so your edge is small and you must say who is on the other side. The seller thinks 26 times a 2028 hope is full payment for a company that has lost money five of the last six years and cannot control its own factory. The buyer thinks the backlog is so deep and the duopoly so absolute that time alone converts it. The settling print is narrow: the 737 rate above 42 and BDS turning operating-positive without new charges, both of which would confirm 2029 estimates, or an ambiguous quarter where deliveries rise but a defense charge eats the gain, in which case you wait rather than add. The left tail, another grounding, is fatter than the market's calm price implies, and it is the tail that permanently impairs capital; the right tail is worth more but arrives slowly.

The bet is still that Boeing keeps building more 737 and 787 jets each quarter, without another safety or quality disaster, until it is turning out planes fast enough to convert its enormous order book into cash. It breaks if the production rate stalls or defense keeps taking charges, and the one pair of numbers that tells you first is the monthly 737 delivery count against quarterly operating cash flow. When both turn convincingly positive together, the turnaround is real; until then you are paying recovery prices for a company still proving it can build a plane the same way twice.