Boeing Earnings: Lowering Fair Value Estimate as Firm Stares Down More Distant Cash Flow Recovery

Key Morningstar Metrics for Boeing

• Fair Value Estimate
  : $242.00
• Morningstar Rating
  : ★★★★
• Morningstar Economic Moat Rating
  : Wide
• Morningstar Uncertainty Rating
  : High

What We Thought of Boeing’s Earnings

Boeing BA delivered 161 jets in the third quarter of 2026, just one more than a year ago, fueling 1% commercial revenue growth and a $700 million loss. Defense sales grew 15% and earned $492 million. Aftermarket services grew 4%, contributing $1 billion in operating profit.

Why it matters: We estimate that half of Boeing’s enterprise value is derived from its 737 product line. Increasing the rate at which the company can make and deliver these jets is the single biggest driver of its near- and long-term profitability and cash flow, and Boeing is working on upping its 737 output from 47 planes per month sometime in 2027.

• Completion of flight testing and certification by the US Federal Aviation Administration of Boeing’s MAX-7 and MAX-10 variants of the 737 finally took place in late October, and we expect certification of the 777X soon.
• Increasing the rate of production is proving tricky, and management pushed out its expectations of the rate of increase by about a year, resulting in an annual free cash flow target of $10 billion by 2029, rather than 2028.

The bottom line: We decreased our fair value estimate for wide-moat Boeing to $242 per share from $254, reflecting more gradual increases in 737 deliveries, revenue, and cash flow.

• Investors disappointed by the moving goalpost traded Boeing’s stock down nearly 10% by midday Oct. 27, and the shares trade 30% below our revised fair value estimate. With a High Morningstar Uncertainty Rating, we would consider the shares a compelling value below $145.