Boeing Stock Sees Rare Value Discount Amid Backlog Uncertainty

Boeing's stock price appears to be at a discount compared to its peers in the aerospace sector, making it an attractive value for investors. The company's valuation discount is evident when looking at price-to-free cash flow (FCF) valuations based on Wall Street consensus from Visible Alpha.

The table shows that Boeing trades at 66.6x FCF in 2025, but this drops to 11.6x by 2030, indicating a significant discount beyond 2028. This raises questions about why Boeing deserves such a valuation discount despite its massive backlog of over 6,200 airplanes worth $597 billion.

The answer lies in the company's past issues with the 737 MAX quality and groundings, as well as delays in commercial aircraft certifications and losses on fixed-price development programs in its defense arm, Boeing Defense, Space & Security (BDS).

However, CEO Kelly Ortberg is making progress in addressing these issues. The production line for the 737 MAX has been ramped up to 47 airplanes per month, with plans to reach 52 per month in the future. Ortberg also confirmed that the new production line in Everett is now open and certification on the 737 MAX 10 is coming soon.