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Boeing: FAA OK to Make More Jets Would Let Firm Meet, Not Beat, Our Forecast

Increasing the rate at which Boeing can make and deliver these jets is the single-biggest driver of profitability and cash flow.

The logo for Boeing appears on a screen above a trading post on the floor of the New York Stock Exchange
Richard Drew
Securities in This Article
Boeing Co
(BA)

Key Morningstar Metrics for Boeing

The Wall Street Journal reported on Sept. 26 that the Federal Aviation Administration has restored Boeing’s BA authority to perform final safety inspections on jets bound for customers, and the agency may soon permit the firm to make more than 38 737 MAXs per month. Boeing’s shares were up around 4% in early trading.

Why it matters: We estimate that half of Boeing’s enterprise value derives from its 737 product line. Increasing the rate at which it can make and deliver these jets is the single-biggest driver of near- and long-term profitability and cash flow.

  • CEO Kelly Ortberg has indicated upward monthly production increments of five 737s will each take at least six months, during which Boeing can prove to the FAA that its manufacturing is stable and consistently delivering safe aircraft.
  • Assuming its first increment above 38 monthly 737s is imminent, we would expect the next one around the second quarter of 2026. This would allow Boeing to exceed our 2025 737 delivery forecast by about 40 planes, and come in about 30 planes shy of our previous 2026 forecast.

The bottom line: Reshaping the trajectory of Boeing’s 737 delivery schedule according to our updated forecast has no net impact on our $249 fair value estimate. The shares remain approximately 11% undervalued.

  • Restored authority to perform safety checks also benefits Boeing’s 787 assembly line by removing timing gaps between the jets’ assembly and inspection, but it doesn’t affect our existing delivery forecast.

Coming up: We anticipate an eventual settlement of the protracted strike and contract negotiations between Boeing and the union representing machinists who work on military jets at its St. Louis plant. We don’t anticipate any new labor arrangement will have a material effect on our fair value estimate.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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