Boeing Secures $131 Billion Defense Contract Amid Valuation Debate

Boeing (BA) has secured a major defense contract worth over $131 billion to produce, modernize, and maintain F-15 Eagle Crest fighter jets for U.S. and allied air forces. Despite this significant deal, Boeing's share price has declined by nearly 10% in the past year, with analysts estimating its current value at around $212 per share.

The stock's recent performance is a mixed bag, with a 30-day return of just 0.28% and a one-year total shareholder return of -9.99%. However, analyst targets and intrinsic value estimates remain above the current price, suggesting that Boeing's fair value could be higher than its current market capitalization.

One narrative suggests that Boeing is overvalued, with a fair value estimate of $160.01 based on revenue growth, profitability inflection, and future earnings multiples. However, this view contrasts with the company's cash flow-based valuation, which estimates its fair value at around $391.88, or roughly 45.9% above its current price.

Boeing's operating recovery is ongoing but incomplete, with Commercial Airplanes narrowing its operating margin from -5.1% to -2.7% on 171 deliveries. The company has also activated a fourth Everett line and targets 52 deliveries per month next year, with the FAA certifying the MAX 7 after nearly a decade.