Boeing (BA) Secures 737 MAX 10 Certification, Is The Upside Already Priced In?
The FAA’s certification of Boeing (BA) 737 MAX 10 in October cleared the last major regulatory hurdle for the program and unlocked deliveries tied to more than 1,500 existing orders.
For investors watching Boeing, the share price tells a mixed story. The stock has fallen 17.3% on a year to date share price basis and the 1 year total shareholder return is down 14.9%, while the 3 year total shareholder return is positive at 4.8%. This suggests long term holders have seen only modest gains despite recent headlines around 737 MAX 10 certification, new digital services like Dataliner, and production setbacks such as the 777 freighter stoppage.
Scan how Boeing fits into a wider watchlist by lining it up against 29 high quality undervalued stocks, which combine solid cash flows with stronger balance sheets.
Boeing now has a certified 737 MAX 10, a halted 777 freighter line and a stock that has fallen double digits this year. Does that mix still tilt the risk reward toward buyers at today’s price?
Most Popular Narrative: 18% Overvalued
Boeing last closed at $188.35 while the most followed valuation narrative anchors fair value at $160.01, which frames the current debate around how much recovery is already accounted for in the share price.
Read the Q2 income statement line by line. Operating earnings of $156 million. Other income of $79 million. Interest and debt expense of $600 million. Tax of $63 million. Net loss of $428 million.
Boeing's operations made money in the quarter. Every dollar of the loss, and more, came from servicing debt. That is a fundamentally different company from the one most commentary describes.
See why 8 investors see Boeing as 18% overvalued.
Result: Fair Value of $160.01 (OVERVALUED)
Still, this depends on two key factors: new programme charges that affect earnings again, and free cash flow not meeting the guidance Boeing has set.
Find out about the key risks to this Boeing narrative.
Another View: SWS DCF Signals Undervaluation
The narrative fair value of $160.01 presents Boeing as 18% overvalued at $188.35. A different lens tells a very different story. Our DCF model values the shares at $405.67, which means the current price sits 53.6% below that estimate and frames the risk in almost the opposite way.
If that gap is driven more by cautious assumptions than by wishful thinking, the bigger question is which view you trust when cash flow is the main anchor for Boeing.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Boeing for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 29 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
Sentiment on Boeing in this article cuts both ways, with clear risks and some evident positives. Act quickly and evaluate both sides of the story by weighing its 4 key rewards and 2 important warning signs.
Looking for more ideas beyond Boeing?
If Boeing has you thinking harder about risk and reward, widen the lens and scan a few focused stock lists built from clear, fundamentals driven filters.
- Target resilient income by reviewing companies screened as potential income anchors through 5 dividend fortresses.
- Hunt for quality at a discount by checking businesses filtered as potential mispriced opportunities in the 21 high quality undiscovered gems.
- Dial down portfolio stress by assessing candidates with stronger financial footing via the 30 resilient stocks with low risk scores.
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