Boeing Secures Key Victories as Company Rebounds

• Boeing has been awarded a $20 billion defense contract along with several billion dollars worth of orders for commercial airplanes.
• The firm is bouncing back from a challenging year in 2024, thanks to better manufacturing outcomes and enhanced stock market performance.
• Experts believe that Boeing's recent successes will enhance their cash flow, boost employee morale, and improve talent retention.

Boeing might finally be heading in an upward direction as it works to regain the trust and favor of both investors and customers.

Since January, the manufacturer has been operating at full capacity, successfully obtaining a profitable defense contract with the U.S. new F-47 fighter jets and securing billions of dollars in new passenger aircraft orders.

Shipments are also coming across as favorable. According to analysts, post-strike 737 production are present at greater than anticipated amounts during this initial quarter.

The victories in these two key business sectors are poised to assist in generating additional revenue, enhancing employee motivation, and securing and keeping engineering professionals as the firm endeavors to stabilize itself following a challenging period. tough 2024 .

Boeing's share price has surged approximately 16% in the last six months, almost recouping losses from a trough in March, despite the overall market conditions. retracted due to worries about tariffs And amid general economic unpredictability, shares have fallen considerably from their peak in 2023.

The analysts seem upbeat, setting an average future price target of $196, which is roughly 10% higher than Wednesday’s closing price.

Obtaining additional aircraft orders and increasing production efforts

On Wednesday, Korean Air completed its purchase of 20 Boeing 777X airplanes. This announcement came after both Japan Airlines and Malaysia Airlines placed their own orders: Japan Airlines ordered 17 new 737 MAX jets, whereas Malaysia Airlines requested as many as 60 of these same aircraft models.

Both models are incredibly important for Boeing The 777X is delayed by at least six years and is now anticipated to debut in 2026, while production of the 737 Max remains limited to 38 units per month.

Nevertheless, these deals contribute to Boeing's backlog of over 6,000 aircraft and indicate customer trust. aircraft deliveries slowed in 2024.

During a January earnings call, CEO Kelly Ortberg, who assumed leadership in August, stated that Boeing might reach 737 Max production at a rate of 42 per month by the conclusion of the year, provided it satisfies federally established quality and safety criteria.

He also presented a strategy to shut down the 737 "shadow factory," where completed planes undergo additional work. fixes to quality issues —which should enhance operational efficiency even more since employees can concentrate entirely on the primary assembly line.

Airlines' clients seem satisfied with the advancements. During a February Barclays conference, United Airlines Chief Financial Officer Michael Leskinen expressed his confidence in the MAX rollout timeline.

"Boeing is doing a pretty miraculous job of turning around and becoming more reliable as a supplier," he said.

A lucrative new defense contract

On Friday, President Donald Trump stated that Boeing has been awarded a $20 billion contract to develop the next-generation U.S. Air Force fighter planes, known as the F-47s. These aircraft are set to replace the current F-22 Raptors.

Boeing beat out its rival manufacturer Lockheed Martin , responsible for producing the U.S.'s fifth-generation F-35 fighter. Since the announcement on Friday, Lockheed's stock price has dropped approximately 6.5%.

JPMorgan analysts described the F-47 contract as a "boon" for the future of Boeing's beleaguered defense division. The corporation has previously faced financial setbacks due to its KC-46 tanker project and delays. Air Force One aircraft .

They mentioned that the financial advantages were "significantly beneficial yet not enormous when considering a revived Boeing," adding that the F-47 has the potential to strengthen Boeing’s standing in the aerospace sector and aid in drawing top talent.

Melius' analysts suggested that the new initiative would likely enhance Boeing's employee morale and assist the firm in retaining "high-caliber engineering professionals."

This could help lift the company out of a a cultural downturn triggered by the aftermath of aircraft quality problems And an almost two-month-long labor strike. Ortberg has taken the lead, proposing measures such as having executives work on the production line.

Despite Kelly Ortberg having taken charge only recently, within this short period, we consider him the appropriate leader to steer Boeing back on track," noted Melius analysts in a client update. "By encouraging staff members to offer candid critiques regarding the organization’s management and atmosphere, he has managed to initiate essential enhancements.

Correction — March 27, 2025: A previous version of this article incorrectly identified Brian West as United's CFO. In fact, he serves as the CFO for Boeing; Michael Leskinen is the correct CFO for United.

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