Boeing Company’s BA shares have dropped 25.6% over the past three months, significantly underperforming the Zacks Aerospace-Defense industry’s 15.1% decline. The company faces several challenges, including execution risk, certification delays, labor shortages, and a high debt load. Trade tensions between the United States and China could further disrupt deliveries, impacting operational performance.
Other defense stocks like RTX Corporation RTX and Lockheed Martin LMT have shown mixed results. RTX shares fell 10.5%, while Lockheed Martin rose 1%. RTX benefits from a recovery in commercial aerospace and strong defense orders, while Lockheed Martin gains from a robust backlog and increased munitions production.
Boeing’s labor shortage is a major concern, with high attrition among early-career employees seeking better opportunities. The company also faces production delays, delivery disruptions, and aircraft order cancellations totaling $3.164 billion during the nine months ended Sept. 30, 2026. Despite a record backlog of $745 billion, these challenges could threaten timely deliveries and revenues.
The 777X program remains a significant risk, with delays in certification and flight-testing requirements. Boeing’s Defense, Space & Security segment, however, delivered strong results, with third-quarter revenues increasing 15% year over year to $7.9 billion. The company secured major defense contracts, including the F/A-XX next-generation fighter aircraft.
The Zacks Consensus Estimate for Boeing’s 2026 earnings per share (EPS) indicates an 82.71% year-over-year improvement. However, the stock’s trailing 12-month return on invested capital (ROIC) is negative, suggesting poor returns on investments. Boeing’s forward 12-month price-to-sales ratio of 1.27X is a discount to the industry average of 2.18X.
Given ongoing execution challenges and weak stock performance, investors may consider avoiding Boeing stock for now. The company carries a Zacks Rank #4 (Sell), indicating a cautious outlook on its near-term investment prospects.