After years of turbulence, it appears that Boeing (BA) is finally gaining altitude. The aerospace giant just reported one of its most optimistic quarters in recent memory, with improved operational efficiency, rising revenue, and the long-awaited return to positive free flow. BA stock has gained 30% over the past year, outperforming the S&P 500 Index’s ($SPX) gain of 18%. So far year-to-date (YTD), BA stock has risen 11%, slightly underperforming the market’s gain of 16%.
Wall Street rates BA stock as a “Strong Buy,” indicating high trust in the company’s growth prospects, financial health, and stock price potential, making it a steal deal of 2025. Should you buy Boeing stock now?
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Valued at $150.5 billion, Boeing is one of the world’s largest aerospace and defense companies that designs, manufactures, and sells commercial airplanes (like the 737, 787 Dreamliner, and 777). It also manufactures defense, space, and security systems, including fighter jets, military drones, satellites, and spacecraft. Essentially, Boeing’s biggest clients are a mix of top global airlines and major government, military, and space organizations.
Boeing’s turnaround story continues to gain altitude. Revenue for the third quarter soared 30% year-over-year (YoY) to $23.3 billion, owing to improved operational performance, increased commercial deliveries, and consistent defense volume. Importantly, Boeing reported positive free cash flow of $238 million, its first since late 2023. This marked a critical milestone in the aerospace giant’s post-crisis recovery.
The company’s Boeing Commercial Airplanes (BCA) business delivered 160 aircraft, its best quarterly total since 2018, and revenue increased by over 50% to $11.1 billion. Despite substantial costs related to the delayed 777X program, the company continues to grow. Orders also flowed in, totaling 161 net, including 50 Dreamliners ordered by Turkish Airlines and 30 737-8 jets by the Norwegian Group. This brought the commercial backlog to $535 billion and more than 5,900 airplanes.
Furthermore, the 737 program stabilized at 38 jets per month and is now ramping up to 42 per month following FAA approval. Boeing also finished rework on all pre-2023 aircraft and closed its shadow factory, indicating a return to smoother, more efficient operations. The 787 Dreamliner program delivered 24 planes in the quarter, decreasing the inventory of older aircraft to only 10. Boeing anticipates delivering the units by 2026, in line with airline fleet projections.
Story Continues
Boeing’s Defense, Space, and Security (BDS) segment reported a 25% increase in revenue to $6.9 billion, with an operating margin of 1.7%. The company recently delivered its 100th KC-46 tanker and received a $2.8 billion contract from the U.S. Space Force for the Evolved Strategic SATCOM Program, strengthening its leadership in national security space systems.
Additional wins in the quarter included $2.7 billion in multi-year contracts for PAC-3 candidates, broadening Boeing’s military portfolio. These fresh orders have brought the segment’s backlog to a record $76 billion.
Furthermore, Boeing’s Global Services (BGS) business continues to generate consistent earnings. Revenue increased by 10% to $5.4 billion, while operating margins improved to 17.5%, owing to robust commercial volume and a favorable mix. The unit received $8 billion in new orders and is continuing to grow its digital and analytics capabilities.
Despite all the encouraging news about the company’s comeback, Boeing’s $4.9 billion charge to reset the 777X development timeline was a brief setback in the quarter. Boeing’s first delivery is now scheduled for 2027, rather than 2026. The delay is due to the postponed FAA authorization for the next certification phase. However, Boeing stressed that the program is technically sound, with successful test flights already delivering critical verification data.
This delay will cause a $2 billion hit to 2026 cash flow. However, according to management, it will turn into a tailwind later in the decade as delayed deliveries are completed. Boeing ended the quarter with $23 billion in cash and marketable securities, $53.4 billion in debt, and $10 billion in undrawn credit lines, which can be used as a backup fund if the business requires additional cash. Even with growing capital expenditures of roughly $3 billion for the year, Boeing expects a positive fourth-quarter cash flow and free cash flow usage of around $2.5 billion in 2025, assuming no external disruptions.
Overall, analysts are strongly bullish on BA stock, with 19 of the 25 covering it rating it a “Strong Buy.” Additionally, two say it is a “Moderate Buy,” three rate it a “Hold,” and one says “Strong Sell.” Its average target price is $256.71, which suggests an upside potential of 30% over current levels. Plus, its high price target of $287 implies BA stock can climb 45% over the next 12 months.
While the 777X delay is only a temporary setback, Boeing’s overall recovery story appears promising. The company is delivering more aircraft, stabilizing production, and gaining large contracts in the commercial, defense, and services segments. Boeing is restoring investor trust with a backlog of over $600 billion, positive cash generation, and improved operational discipline. For long-term investors, the aerospace giant’s strengthening fundamentals and rebounding margins make it a strong argument to buy and hold BA stock.
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On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
