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    Is Avolon 737 MAX Order Altering The Investment Case For Boeing (BA)?

    Simply Wall St·10/10/2026 23:27:45
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    • Avolon recently announced firm orders for 250 new-technology aircraft, including 140 Boeing 737 MAX jets, lifting Boeing’s commercial backlog subject to Bohai Leasing shareholder approval.
    • The scale of this lessor order tests Boeing’s ability to convert strong single-aisle demand into reliable deliveries while managing ongoing 737 production constraints and thin margins.
    • The focus now turns to how Boeing’s investment narrative absorbs this large Avolon 737 MAX order amid ongoing production and balance-sheet pressures.

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    Boeing Investment Narrative Recap

    To own Boeing here, you need to believe the huge commercial backlog and new defense work eventually translate into steadier output, better program economics, and enough free cash generation to deal with its sizeable debt. The Avolon 737 MAX order reinforces demand, but does not change that the near term story is still about production stability and execution on existing commitments.

    The key short term catalyst remains evidence on 737 and 787 production consistency and how that flows through free cash flow, especially at the upcoming results. The biggest risk stays the same: ongoing supply chain and certification issues that keep commercial margins weak, stretch working capital, and make that debt wall harder to manage.

    In this context, the roughly US$14.7b undefinitized contract with Lockheed Martin to expand PAC 3 MSE seeker output looks important. It deepens Boeing’s role in missile systems and adds multi year visibility for the Defense, Space & Security division at a time when commercial airplanes still carries program losses and quality overhangs.

    For you as an investor, that contract is less about headline size and more about execution and capital intensity. Tripling seeker production will demand disciplined cost control, on time delivery, and careful balance between upfront investment and cash collection. Progress there could offset some commercial volatility, while missteps would add pressure to an already stretched balance sheet.

    Boeing Consensus Growth Set-Up

    Boeing's current analyst playbook leans heavily on the idea that the backlog, defense contracts, and services all add up to a very different earnings profile by the late 2020s. Consensus assumptions are built around revenue increasing by 10.9% a year over the next three years, profit margins moving from 2.1% today to 6.3% by around 2029, and earnings climbing from US$1.9b now to US$7.9b. That earnings bridge implies a little more than a 4x step up in profit, which is a big ask for any industrial group that is still working through program losses, delivery bottlenecks, and a heavy debt load.

    On those same numbers, analysts are effectively asking you to underwrite Boeing at a P/E that compresses from 89.8x today to 39.0x on the 2029 earnings estimate. That future multiple would sit slightly below the cited 39.7x P/E for the broader GB Aerospace & Defense peer group. Price target dispersion tells you how uncertain that pathway looks. The consensus target sits at US$270, with the highest estimate at US$300 and the lowest at US$230. That spread is wide for a mature aerospace business and reflects how differently people are thinking about production stability, regulatory risk, and capital structure repair.

    Underpinning the US$270 target is a model that has Boeing generating about US$125.6b of revenue and US$7.9b of profit in 2029, discounted back using roughly an 8.5% cost of capital. Share count is assumed to expand by 4.25% a year for the next three years, so earnings per share growth relies on more than just the headline profit number. For you as an investor, the key question is not whether those exact figures prove right but whether the rough contour of that story, stronger margins on a larger top line with a more normal P/E, feels realistic given what you know about Boeing's programs and balance sheet today.

    Boeing's narrative projects US$125.6b revenue and US$7.9b earnings by 2029. This rests on 10.9% yearly revenue growth and an earnings step up of about US$6b from US$1.9b today.

    Uncover why Boeing's fair value indicates a 42% potential upside to its current price, which could narrow quickly.

    NYSE:BA 1-Year Stock Price Chart
    NYSE:BA 1-Year Stock Price Chart

    Exploring Other Perspectives

    The alternate lens puts Boeing’s execution risk front and center. Those lowest analysts were assuming revenue of about US$123.5b and earnings near US$6.3b by 2029, well below the baseline path. You can read that as a far more cautious story in which the Avolon order could still reshape over time.

    Explore 5 other Boeing fair value estimates, including one that suggests it could be worth just $240.00!

    Reach Your Own Conclusion

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

    Looking For More Investment Ideas Beyond Boeing?

    If you want to stress test your Boeing thesis against other opportunities, it helps to scan a wide field of companies with different risk and income profiles. The Simply Wall St screener can surface stocks with the cash generation, balance sheet strength, or income potential that best matches how you prefer to invest.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.