Boeing Shares Soar on Double Upgrade and FAA Approval

Boeing's stock jumped by 8% on Monday, outperforming its peers in the aerospace and defense sector. The surge was driven by two pieces of company news: a BNP Paribas analyst upgraded Boeing's rating from Sell to Buy, a rare double upgrade that skipped Hold entirely, and the FAA granted an amended type certificate for the 737-7.

The certification is not a surprise, as management had previously stated that testing on the 737-7 was already finished and the certificate was imminent. The airplane does not start deliveries until 2027, and airlines will need months to work it into their schedules.

The freed test engineers are expected to be moved onto the 777X program, which has a harder deadline and is crucial for Boeing's 2027 delivery promises. With over 55% of its certification flight testing completed as of its latest update, the 777X faces significant pressure to meet its first delivery target.

The type certificate does not address the near-term constraint, which lies in supply chain issues and delivery paperwork rather than in Monday's approval. Boeing needs GE's engine recovery before it can increase production on the 787 line, which currently sits at 8 airplanes a month.