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Where Will Boeing Stock Be by This Time Next Year?
Key Points
The 737 MAX production and delivery ramp was recently pushed back, but the new guidance looks conservative.
Certification and first delivery in the 777X would be a major de-risking event for Boeing.
Boeing (NYSE: BA) is a fascinating company and an attractive stock for value-oriented investors. Its mammoth $745 billion backlog (including $612 billion in commercial airplanes) gives investors confidence in a long-term stream of income, and this time next year the company could have delivered on two major catalysts that could propel the stock significantly higher.
Two catalysts for Boeing stock in 2027
The two things to look out for next year are:
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- Achieving a ramp in production on the 737 MAX to hit 52 a month in the second half of the year and management guidance on the next leg upward.
- Certification and first delivery on the 777X (the 777-9 variant).
Management guided toward both events on its recent earnings call.
Image source: Boeing.
737 MAX delivery ramp
The 737 MAX production and delivery ramp is critical, and although management recently walked back expectations on the ramp, it did so in a manner that suggests the bar may be set relatively low. Management expects to hit 52 a month in the back half of 2027 and then "closer to the mid- to-high 50s on deliveries in '29."
While noting that deliveries lag production, Boeing will still have roughly two years to hit the "mid-to-high 50s" from 52 a month in 2027. If management can stabilize at a rate of 52 a month next year and then guide toward, say, 57 a month in 2028, then it will represent an improvement on the standing guidance.
777X certification
The wide-body 777X was supposed to enter service in 2020, and its delay has caused significant issues, not least the cash tied up in inventory and in program work before any revenue from deliveries kicks in. As such, certification and first delivery (on the larger 777-9 variant) next year will be a major de-risking event for Boeing, potentially leading to upgrades to expectations for the program.
Where next for Boeing
There's no guarantee these events will happen, but they look like reasonable assumptions. As a result, I think Boeing's stock could be materially higher next year. Something to consider.
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Boeing. The Motley Fool has a disclosure policy.