Boeing secured a $20 billion defense contract and billions in commercial aircraft orders. The company is recovering from a tough 2024 with improved production and stock performance. Analysts see Boeing's recent wins boosting cash flow, employee morale, and talent retention.
Boeing may finally be on an upward trajectory as it claws its way back into the good graces of investors and customers.
Since January, the manufacturer has been firing on all cylinders, securing a lucrative defense contract for the US' new F-47 fighter jet and scoring billions of dollars worth of new passenger plane orders.
Deliveries are looking good, too. Analysts estimate that post-strike 737 production is at higher-than-expected levels in the first quarter so far.
The wins in two critical business segments are set to help bring in more cash, boost employee morale, and attract and retain engineering talent as the company works to right itself after a very tough 2024.
Boeing's stock price has rallied about 16% over the past six months, nearly recovering from a March low, even as the broader market has pulled back amid tariff concerns and overall economic uncertainty. Shares remain down significantly from a 2023 high.
Analysts appear optimistic, with an average future price target of $196, or about 10% above Wednesday's closing price.
Securing more aircraft orders and ramping up production
On Wednesday, Korean Air finalized its order for 20 Boeing 777X planes. The news followed Japan Airlines and Malaysia Airlines' respective orders for 17 and up to 60 new 737 Max's.
Both models are incredibly important for Boeing. The 777X is at least six years behind schedule — with its launch now expected in 2026 — and 737 Max output is capped at 38 a month.
Still, the deals add to Boeing's more than 6,000-strong backlog and signal customer confidence after aircraft deliveries slowed in 2024.
In a January earnings call, CEO Kelly Ortberg, who took over in August, said Boeing could achieve a 737 Max production rate of 42 a month by the end of the year, assuming it meets federally agreed-upon quality and safety metrics.
He also outlined a plan to close the 737 "shadow factory" — where already-built jets receive fixes to quality issues — which should further boost operational efficiency as workers can fully focus on the main assembly line.
Airline customers appear pleased with the progress. United Airlines CFO Brian West said at a February Barclays conference that he is confident in the Max delivery schedule.
"Boeing is doing a pretty miraculous job of turning around and becoming more reliable as a supplier," he said.
A lucrative new defense contract
President Donald Trump announced on Friday that Boeing secured a $20 billion contract to produce the sixth-generation US Air Force fighter jets, designated F-47. The fleet will replace the F-22 Raptor.
Boeing beat out rival manufacturer Lockheed Martin, which produces the US' fifth-generation F-35 fighter. Lockheed's stock has fallen about 6.5% since the Friday announcement.
JPMorgan analysts called the F-47 contract a "shot in the arm" for the future of Boeing's struggling defense business. The company has already suffered losses from its KC-46 tanker program and delayed Air Force One aircraft.
They said the financial benefits are "clearly meaningful but not massive in the context of a recovered Boeing," noting the added the F-47 could bolster Boeing's position in the aerospace industry and help attract talent.
Analysts at Melius said the new program is also expected to boost Boeing's employee morale and retain "top engineering talent."
This could help lift the company out of a cultural slump created by the fallout from aircraft quality issues and a nearly eight-week labor strike. Ortberg has led the charge, outlining initiatives like putting executives on the factory floor.
"Although Kelly Ortberg has been at the helm for less than a year, we believe he is the right leader to turn Boeing around," Melius analysts said in a note to clients. "He has empowered employees to provide "brutal" feedback on the company's leadership and culture, allowing him to implement necessary improvements."
This article was written by Taylor Rains from Business Insider and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.