THE BOEING COMPANY (BA): what the price assumes

In the published model solve dated 2026-Q2, anchored at $209.82, THE BOEING COMPANY (BA) is priced for today's economics sustained for ~8.9 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/BA

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: elevated (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.0%); the inversion above states its own rate.

Per-Model Detail (n=3)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• The order book is the asset: about 694 billion dollars of contracted work sat in backlog at the end of March 2026, the great bulk of it commercial airplanes, so what limits Boeing now is what it can build rather than what it can sell.
• Program accounting is where the damage shows up: roughly 4.9 billion dollars of losses were booked on the 777X during 2025 against jets not yet handed over, and the same mechanism sits under every fixed-price defense program still in development.
• Second-quarter results are due July 28, 2026, after a first half in which 314 commercial jets were delivered and the 737 line moved up to the 47-a-month rate the FAA cleared in late May.

Bull Case

Begin where the money went. The 777X has absorbed loss after loss, and the 2025 annual report states it without softening: The Company has recognized approximately $4.9 billion in reach-forward losses on the 777X program in 2025. Combined reach-forward charges across the widebody programs came to about 5.3 billion dollars for the year. Read cold, that is a company still bleeding. It is worth understanding what the accounting actually did, because the answer changes the forward picture more than the headline does.

Commercial jets are accounted for by program, not by unit. When Boeing concludes that the remaining cost to finish a program exceeds the remaining revenue it will collect, it books the entire estimated shortfall at once, against aircraft it will not hand over for years. The charge is a forecast of future losses pulled into the present. Once a program sits in that position, later deliveries stop adding to the reported loss, because the loss was recognized when it was estimated rather than when the airplane rolled out. The 777X charges are not a running rate of destruction. They are the prepayment of one.

What has changed underneath is the rate. The 737 line ran at 42 a month during the first quarter of 2026 and cleared the FAA capstone review for 47 a month in late May. Boeing delivered 171 commercial airplanes in the second quarter and 314 for the year to date. Rate is close to the whole game for an airframer sitting on 575.6 billion dollars of commercial backlog. The factory, the tooling and the engineering base cost roughly the same whether the line runs at 38 or 47, so the incremental airplane carries a disproportionate share of whatever profit the year produces.

Boeing also took back the part of the supply chain that broke. The Spirit acquisition pulled fuselage fabrication inside the company, and the 10-K records that Provisional goodwill of $9,997 associated with the Spirit Acquisition was provisionally assigned to our BCA segment as we expect the majority of synergies from the Spirit Acquisition to relate to the commercial airplane segment, the figure stated in millions. Owning the fuselage line does not by itself fix quality. It does put the defect and the fix inside one management chain instead of across a contract boundary, which is the specific failure mode that produced the rate cap in the first place.

The least discussed segment is the steadiest one. Global Services is roughly a quarter of revenue and sells parts, modifications, training and support into an installed base Boeing itself built. The economics of that market are visible in the firms that do nothing else: TDG earns a 46.5% operating margin and HEI 23.5%, both on the aftermarket side of aviation rather than the manufacturing side. TDG's own filing explains why those positions hold, noting that customers have a reduced incentive to certify another supplier because of the cost and time of the technical design and testing certification process. Boeing sits on the incumbent side of that same certification barrier for its own airframes, and it holds 33.0 billion dollars of services backlog behind it.

Money has started moving in the right direction too. Selling the Digital Aviation Solutions business cost about 305 million dollars of quarterly revenue and turned first-quarter investing activities into a 5.7 billion inflow. The company also reports that it continues to be in compliance with all covenants contained in our debt, with committed credit lines held as backup rather than drawn. A business that can fund its own ramp does not have to time the capital markets, and until very recently Boeing did have to.

Bear Case

The competitors that matter most to Boeing's profit are not the ones that build airplanes. In the aftermarket, where aviation earns its most durable returns, TDG posts a 46.5% operating margin and HEI 23.5%, both chasing the same spares, repair and modification dollars that Global Services depends on. Boeing's own annual report does not pretend the fight is easy: Aviation services is a competitive market with many domestic and international competitors. This market environment has resulted in intense pressures on pricing, and we expect these pressures to continue or intensify. On the airframe side, Airbus spent the rate-capped years selling narrowbody slots into the back half of this decade, and slots sold are not recoverable by building faster afterward. Delivery positions are the scarce good in this industry, and Boeing gave several years of them away.

Now the price. At 209.49 dollars a share the market values the company at about 35 times what it earns at the operating line in a normal year, and carrying that valuation requires operating profit to compound at the ceiling of what the business could finance from its own cash flow across a seven-year stretch. History is unkind to that assumption: only about 23% of companies that have run at such a pace sustained it that long. Set the same demand in profitability terms and it gets starker. Today's price needs something near a 10% operating margin, against about 7% through the cycle and an operating line that is negative over the trailing twelve months.

That gap is not academic, because the mechanism that closed it before is the mechanism that keeps reopening. Boeing's development programs are largely fixed-price, which means the customer's payment is capped and the cost is not. The 10-K describes one defense program awarded at a contract price of 890 million dollars on which a reach-forward loss of 291 million was recognized in the quarter the competition was won. A win, booked as a loss, on the day of the win. The 777X is the same arithmetic on a vastly larger program, and the annual report is explicit that customers hold contractual remedies, including compensation for late deliveries or rights to reject individual airplane deliveries based on delivery delays. Schedule slips are not just embarrassing; they are contractually expensive.

Holders have been funding the repair. The share count has compounded at 7.4% a year over the four years to March 2026, so whatever per-share earnings the recovery eventually produces are spread across meaningfully more owners than held the stock when the trouble started. Net funded borrowings sit near 36.2 billion dollars, against gross borrowings of about 57.1 billion and roughly 20.9 billion of liquid assets on the balance sheet. That works out to about 5.9 times operating profit, measured against normal-year earnings rather than the trailing loss, which is a manageable load while deliveries climb and a heavy one if they stall.

The bear case does not require a crash. It requires only that the ramp behaves the way ramps at this company have behaved: a quality escape, a supplier interruption, a certification date that moves right. Every method that reaches today's price assumes none of those happens for the better part of a decade.

Valuation

Today's price is a recovery already underwritten. The market pays about 35 times what Boeing earns at the operating line in a normal year, and the normal-year figure is doing real work here, since the trailing twelve months carry an operating loss rather than a profit. Sustaining that valuation implies operating profit compounding at the top of what the business could finance internally over a seven-year stretch. Roughly 23% of companies that have run at that pace held it for that long.

The methods used to cross-check the price split cleanly, and the split is the informative part. The two approaches that reach today's level are the peer-multiple lens and the forward-growth lens. Everything anchored on profit as it stands falls away, for the plain reason that there is no current profit to anchor on, and equity book value per share is small enough after years of losses that the book-value approaches are not a meaningful check either.

It is worth looking at how the surviving approaches get where they get. The peer read that reaches the price applies a sector price-to-sales ratio near two to trailing revenue of 92.2 billion dollars. A revenue multiple is indifferent to whether revenue converts into profit, which is precisely the open question. Run the same peer lens against trailing EBITDA and it lands below a third of the current price. The cash-flow approach that comes closest assumes the market still pays the same multiple for Boeing's EBITDA at the end of a seven-year projection that it pays today, held flat rather than compressing. And the most generous method in the set assumes the operating margin swings from roughly negative eight percent to twelve percent across a seven-year ramp while revenue compounds near thirty percent a year. Each of those is a defensible modelling choice on its own. Stacked, they describe an assumption rather than an observation.

The cohort makes the demand concrete. GD runs a 10.2% operating margin on 53.8 billion dollars of revenue and RTX 10.9% on 90.4 billion, and both convert that revenue to profit today. Boeing's through-the-cycle figure is 7%. The price is not asking Boeing to match those peers. It is asking Boeing to beat its own normal-year margin and then keep compounding from there, which is a different and harder request.

What the backlog buys is time. Contracted work at March 31, 2026 stood at 575.6 billion dollars in Commercial Airplanes, 85.8 billion in Defense, Space and Security and 33.0 billion in Global Services, and the first quarter brought a 5.7 billion inflow from investing as the Digital Aviation Solutions sale closed. Against that, net funded borrowings near 36.2 billion dollars and a share count growing 7.4% a year set the terms of the wait. Demand is contracted for years. The profit is not.

Catalysts

Second-quarter results land on July 28, 2026, with chief executive Kelly Ortberg and finance chief Jay Malave taking the call. That print is the first full quarter to reflect both the higher 737 rate and a services segment without the divested Digital Aviation Solutions revenue, so the comparison lines will be noisy and the delivery-driven cash figures will be the cleaner read.

The delivery data is already out and it is the strongest part of the setup. Boeing handed over 171 commercial airplanes in the second quarter, made up of 129 737s, 25 787s, 10 767s and 7 777s, bringing commercial deliveries to 314 for the year to date. Defense, Space and Security delivered 35 aircraft and systems in the quarter and 65 year to date, including KC-46 tankers, P-8s, F-15 and F/A-18 fighters, and Apache, Chinook and MH-139 rotorcraft.

Production rate is the variable to track from here. The 737 program moved to 42 a month during the first quarter and began the final phase of 737-10 certification flight testing. In late May the chief executive said the company had passed the FAA capstone review for 47 a month and was running the line at that rate, with a stated ambition of 52 and eventually 63. Each step up is worth more to earnings than the one before it, and each is contingent on the FAA and on a supply chain Boeing has only recently brought partly in-house.

Peer Cohorts (Per Segment, With Filing Citations)

Commercial Airplanes (reported)

• GD (GENERAL DYNAMICS CORPORATION)
• FY2025 10-K: …customers was $9.2 billion in 2025, $8 billion in 2024 and $6.1 billion in 2023, which represented 17% of our consolidated revenue in 2025, 17% in 2024 and 14% in 2023. We conduct business with customers around the world. Our non-U.S. defense subsidiaries maintain long-term relationships with their customers and have…
• FY2025 10-K: …but did reduce the Aerospace operating margins by 30 basis points in 2025. The duration and extent of the tariffs continue to evolve. The ongoing sanctions on Russia have also restricted access to a segment of the market. Overall, we believe our investments in a new family of Gulfstream aircraft will continue to fuel…
• TXT (Textron Inc.)
• FY2025 10-K: …with commercial customers have a single performance obligation as there is only one product or service promised or the promise to transfer the product or service is not distinct or separately identifiable from other promises in the contract. Revenue is primarily recognized at a point in time, which is generally when…
• FY2025 10-K: …Our segments include numerous separately incorporated subsidiaries. Effective January 4, 2026, the beginning of our 2026 fiscal year, the business activities of the Textron eAviation segment were realigned within Textron's other operating segments resulting in the elimination of the Textron eAviation segment as a…
• HEI (HEICO CORPORATION)
• FY2025 10-K: …and business aircraft, aircraft engines and related components and equipment. Due in large part to our established industry presence, we enjoy strong customer relations, name recognition and repeat business. We sell our products to a broad customer base consisting of domestic and foreign commercial and cargo…
• FY2025 10-K: …a compound annual growth rate of approximately 16%. During the same period, we improved our net income from 2 Index $2.0 million to $690.4 million, representing a compound annual growth rate of approximately 18%. Disciplined Acquisition Strategy Acquisitions have been an important element of our growth strategy over…
• TDG (TransDigm Group Incorporated)
• FY2025 10-K: …that they will have a reduced incentive to certify another supplier because of the cost and time of the technical design and testing certification process. In addition, we believe that the availability, dependability and safety of our products are reasons for our customers to continue long-term supplier…
• FY2025 10-K: …following table sets forth, for the periods indicated, certain financial information by reportable segment, which includes a reconciliation of EBITDA As Defined to consolidated income from continuing operations before income taxes (in millions): Fiscal Year Ended September 30, 2025 Power & Control Airframe…

Defense, Space & Security (reported)

• HON (Honeywell International Inc)
• FY2025 10-K: …in air travel demand due to regional restrictions or suspension of service for events related to public health, safety, the environment, or regional conflicts. Operating results could also be impacted by changes in overall trends related to end market demand for the product portfolio, as well as new entrants and…
• FY2025 10-K: …and we may incur additional costs to comply with such demands. While we have experienced, and expect to continue to experience, these types of threats and incidents, none of them to date have been material to the Company. We seek to deploy comprehensive measures to deter, prevent, detect, respond to, and mitigate…
• GE (GENERAL ELECTRIC COMPANY)
• FY2025 10-K: …and Propulsion & Additive Technologies businesses. DPT was approximately 23% of total GE Aerospace revenue for the year ended December 31, 2025, with services representing 51% of total DPT revenue. Defense & Systems - Defense & Systems designs, develops, manufactures and services jet engines and avionics and power…
• FY2025 10-K: 1, 2024, as a result of contract modifications, engines contracted under long-term service agreements that have now been put into service and from equipment orders outpacing revenue recognized. DEFENSE & PROPULSION TECHNOLOGIES. Our results in 2025 reflect domestic and international government defense departments'…
• MMM (3M COMPANY)
• FY2025 10-K: …next several years. Network disruptions, security and data breaches, cyberattacks, and other cybersecurity incidents involving the Company's information technology systems, networks and infrastructure could: disrupt or interfere with the Company's operations; result in the compromise and misappropriation of…
• FY2025 10-K: …training, monitoring of networks and systems, patching, maintenance, and backup of systems and data), the Company's information and operational technology systems, networks and infrastructure have experienced and are expected to experience cyberattacks of various degrees of sophistication, and are susceptible to…
• ITW (ILLINOIS TOOL WORKS INC)
• FY2025 10-K: …consequences if its employees, agents or business partners violate anti-bribery, competition, export and import, trade sanctions, data privacy, environmental, artificial intelligence, human rights or other laws. The Company has a decentralized operating structure under which its individual businesses are allowed…
• FY2025 10-K: …and cybersecurity leadership experience and holds the Certified Information Security Manager ("CISM") designation. The CISO reports directly to the Chief Information Officer ("CIO") and is responsible for leading the execution of the Company's cybersecurity strategy. On a quarterly basis, or sooner if appropriate,…
• ROP (ROPER TECHNOLOGIES INC)
• FY2025 10-K: …all of which may cause a loss in customers, refunds of product fees, and/or material harm to our reputation and operating results. While certain of our businesses have experienced temporary disruptions, their impact has been limited and did not have a significant impact on our businesses. Global cybersecurity threats…
• FY2025 10-K: …used in numerous identity access management applications across a variety of vertical markets. Verathon - medical devices that enable airway management, including bronchoscopes and video laryngoscopes, and bladder volume measurement solutions for healthcare providers. 6 Materials and Suppliers We believe most…

Global Services (reported)

• HEI (HEICO CORPORATION)
• FY2025 10-K: …130 countries, with approximately 38% of our consolidated net sales in fiscal 2025 derived from sales to foreign customers. We expect that sales to foreign customers will continue to account for a significant portion of our revenues in the foreseeable future. As a result, we are subject to risks of doing business…
• FY2025 10-K: …components for the commercial, regional and general aviation markets. The FSG also is a leading supplier, distributor, and integrator of military aircraft parts and support services primarily to the U.S. Department of Defense, defense prime contractors, and foreign military organizations allied with the U.S. Further,…
• TDG (TransDigm Group Incorporated)
• FY2025 10-K: …from other types of disasters, including power loss, fire, explosions, floods, communications failures, terrorist attacks and similar events. Disruptions could also occur due to health-related outbreaks and crises, cyber-attacks, computer or equipment malfunction (accidental or intentional), operator error or process…
• FY2025 10-K: …2025-09-30 0001260221 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember tdg:NetSalesMember 2024-10-01 2025-09-30 0001260221 us-gaap:DesignatedAsHedgingInstrumentMember us-gaap:CashFlowHedgingMember tdg:InterestExpenseNetMember 2024-10-01 2025-09-30 0001260221…
• RTX (RTX CORPORATION)
• FY2025 10-K: …products and services. Collins Aerospace is a leading global provider of technologically advanced aerospace and defense products. Collins' solutions include aftermarket services for civil and military aircraft manufacturers, commercial airlines, and regional, business, and general aviation, as well as for defense and…
• FY2025 10-K: 025-07-21 2025-07-21 0000101829 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember rtx:SimmondsPrecisionProductsBusinessMember rtx:CollinsAerospaceMember 2025-10-06 0000101829 us-gaap:DisposalGroupDisposedOfBySaleNotDiscontinuedOperationsMember rtx:SimmondsPrecisionProductsBusinessMember…
• GE (GENERAL ELECTRIC COMPANY)
• FY2025 10-K: …http://fasb.org/us-gaap/2025#LongTermDebtAndCapitalLeaseObligations http://fasb.org/us-gaap/2025#LongTermDebtAndCapitalLeaseObligations iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure ge:loan ge:category ge:employee ge:plan ge:tax_return ge:jurisdiction ge:lawsuit ge:segment 0000040545 2025-01-01…
• FY2025 10-K: 040545 us-gaap:SegmentDiscontinuedOperationsMember ge:IndemnificationAgreementTransitionServicesAgreementAndTaxMattersAgreementMember ge:GEHealthCareMember 2025-12-31 0000040545 us-gaap:SegmentDiscontinuedOperationsMember us-gaap:IndemnificationGuaranteeMember 2025-12-31 0000040545 ge:LindseyAndPriestTolaCasesMember…
• CW (CURTISS-WRIGHT CORPORATION)
• FY2025 10-K: …production orders to begin materializing by the middle of the next decade. General Industrial We derive revenue from our widely diversified offering to the general industrial market, which primarily consists of electronic sensors and control systems, electro-mechanical actuation, and surface treatment services. We…
• FY2025 10-K: …in which the majority of our sales are to the downstream markets. Sales in these industries are driven by global supply and demand, crude oil prices, industry regulations, and the natural gas market, with growth rates in this market closely linked to global GDP. We maintain a global maintenance, repair, and overhaul…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.