Boeing Shares Soar on 737 Max 7 Certification, But Valuation Concerns Persist

Boeing's share price has surged 8.46% over the past week, outpacing its year-to-date return of 2.92%, after the Federal Aviation Administration certified the 737 Max 7 for commercial service.

The certification removes a long-standing regulatory hurdle and allows Boeing to begin delivering completed jets from its storage facilities, where roughly 30 airframes are ready for retrofit.

However, valuation remains a concern for investors, with some analysts pegging fair value at $160.01 using a 10% discount rate, creating a sizable gap between the current price of $234.42 and potential long-term growth prospects.

A discounted cash flow model estimates Boeing's future cash flows at $395.28 per share, suggesting that the current price is undervalued.