Boeing Discount Presents Opportunity Amid Backlog Growth

Boeing's valuation discount is causing investors to take notice. The company trades at a lower price-to-free cash flow ratio compared to its peers, including GE Aerospace and Hexcel. This discount may present an attractive opportunity for value-oriented investors.

The company's backlog of over 6,200 aircraft, worth $597 billion, is a significant portion of the rationale for buying aerospace stocks. However, Boeing's valuation discount can be attributed to issues such as the 737 MAX quality problems and groundings, as well as delays in commercial aircraft certifications and massive losses on fixed-price development programs in its defense arm.

CEO Kelly Ortberg has been working to address these issues. He announced that Boeing is ramping up production of the 737 MAX from 47 airplanes per month to 52, with a new production line opened in Everett, Washington. The company also acquired Spirit AeroSystems in December 2025, derisking its supply chain for fuselages and other components.

While there are signs of progress, Boeing still needs to convince investors that it can execute on its massive backlog. The company's sale of its eVTOL business, Wisk, to Archer Aviation helps to focus Boeing on its core business.