Boeing Soars on Strong Earnings and Major 737 MAX Orders, But Valuation Questions Loom
After a turbulent period, The Boeing Company (NYSE: BA) is showing signs of a sustained comeback. The aerospace giant's full-year 2025 results surpassed market expectations, marking a return to profitability. This financial turnaround is bolstered by renewed commercial momentum, underscored by major new orders for its 737 MAX aircraft from Air India and Air Cambodia.
The market has responded positively, with Boeing's share price reaching $235.95. This represents a 90-day return of over 20% and a one-year total shareholder return nearing 30%. This surge reflects growing investor confidence, driven by the order wins even as the company continues to navigate regulatory scrutiny over its MAX program and ongoing development of its 777X widebody jet.
However, the strong rally has sparked a debate among analysts: Is Boeing still undervalued, or has the stock already priced in its future growth? According to one widely followed analysis by FrugalBull, Boeing's fair value is estimated at $206.79, suggesting the stock is currently overvalued by approximately 14%. This narrative hinges on Boeing achieving faster delivery rates and improved profit margins.
In contrast, a discounted cash flow (DCF) model from Simply Wall St presents a more bullish case, calculating a fair value of $330.15—a figure that implies a significant discount at current prices. The divergence highlights the uncertainty surrounding Boeing's operational execution and its ability to manage a leveraged balance sheet amid potential production or regulatory setbacks.
Market Voices:
"This is the inflection point we've been waiting for," says Michael Thorne, a portfolio manager at AeroCapital Advisors. "The orders from Air India and Cambodia are a powerful vote of confidence in the MAX platform. The operational turnaround seems to be gaining real traction."
"The street is getting ahead of itself, again," counters Rebecca Shaw, an independent aerospace analyst known for her critical stance. "Celebrating orders is one thing; delivering planes on time and without defects is another. The 777X is a black hole for cash, and the supply chain is still a mess. This valuation ignores the mountain of execution risk."
"The two valuation models show how polarized views are," notes David Chen, a markets editor at The Financial Chronicle. "Investors are essentially betting on whether Boeing's management can finally deliver consistent operational performance. The next few quarters will be critical."
For investors, the key considerations now extend beyond top-line orders to Boeing's execution on deliveries, margin improvement, and the final certification pathway for the 777X. The company's ability to convert its order backlog into reliable cash flow will ultimately determine if the current stock price is justified.
This analysis is based on historical data and analyst forecasts using an unbiased methodology. It is not intended as financial advice and does not constitute a recommendation to buy or sell any security. Simply Wall St has no position in any stocks mentioned.