Boeing Stock Rises 41.4% in a Year: What Should Investors Do Now?

The Boeing Company’s BA shares have rallied 41.4% over the past year compared with the Zacks Aerospace-Defense industry’s growth of 15.8%, as the jet giant benefits from growing commercial air travel and solid defense backlog. 
 

Considering Boeing’s outperformance over its industry, investors might ask themselves whether this is a good time to add BA stock to their portfolio. Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.

What Pushed BA Stock Up?

As the largest U.S. commercial aircraft manufacturer, Boeing has been witnessing notable growth in its commercial airplanes business in the form of solid delivery and order activity, which in turn has resulted in its share price appreciation. Evidently, sales from the company's Commercial Airplanes business surged 81% year over year in the second quarter of 2025, backed by a solid 63% increase in delivery numbers. Strong order activity for its defense business has also been bolstering its performance at the bourses.

As far as its order activities are concerned, a few notable ones include the $173 million worth contract that Boeing clinched in October 2025, to produce eight MH-139A Grey Wolf helicopters and provide training and sustainment support services for the U.S. Air Force. 

In September 2025, Norwegian Group placed order for 30 of Boeing’s 737-8 aircraft. In the same month, Turkish Airlines announced the carrier’s largest-ever Boeing widebody purchase — a firm order for up to 75 787 Dreamliners. Turkish Airlines also plans to buy up to 150 additional 737 MAX jets, which would mark its biggest Boeing single-aisle order. 

In August, Korean Air announced its intent to purchase 103 of Boeing's fuel-efficient family of airplanes, including 777-9s, 787-10s, 737-10s and 777-8 Freighters. This order marked Boeing's largest widebody order from an Asian carrier.

Can BA Stock Continue With Its Rally?

During the second quarter, the company booked 455 net commercial airplane orders. Such strong order activity should continue to bolster Boeing’s commercial revenue performance over the long term, given the latest Boeing Commercial Market Outlook report projecting global demand for 43,600 new commercial planes through 2044.

Boeing also forecasts a $4.7-trillion market opportunity for commercial aviation support and services between 2025 and 2044. This should bode well for its Global Services business unit over the long run, with its total backlog being $21.94 billion as of June 30, 2025.

During the second quarter of 2025, the Boeing Defense, Space & Security (“BDS”) unit won key contract awards worth $19 billion, which resulted in a solid backlog amount of $74 billion for this segment as of June 30, 2025. Such a solid backlog count should continue to bolster the BDS unit’s revenues, which registered a solid year-over-year increase of 10% in the second quarter.

Let’s see if BA’s near-term estimates reflect similar growth trends.

BA Stock’s Estimates

The Zacks Consensus Estimate for BA’s 2025 sales indicates a  year-over-year surge of 28.9%, The loss per share estimate is pinned at $2.95, which implies a significant improvement from the year-ago quarter’s loss of $20.38. The EPS estimates for 2026 also reflect similar improving trends. 
 

However, the stock’s near-term estimates (except that for 2026) have moved south in the past 60 days, reflecting analysts’ skepticism revolving around the jet giant’s earnings growth prospects. 
 

Other prominent jet makers like Airbus Group EADSY and Embraer SA ERJ have also been benefiting from the growing air passenger traffic growth trends. 

The Zacks Consensus Estimate for Airbus Group’s 2025 EPS indicates a year-over-year increase of 26.9% and that for 2026 EPS suggests an improvement of 16.7%.  

The Zacks Consensus Estimate for ERJ’s 2026 EPS indicates a year-over-year increase of 150.4%.  

Risks to Consider Before Choosing Boeing

While Boeing presents strong growth potential, it also faces key challenges that investors should weigh carefully. Despite growing air travel demand worldwide, persistent global supply-chain disruptions, especially shortages of critical parts, continue to hinder and are expected to affect the aviation industry in the rest of 2025. This remains a major risk factor for jet manufacturers like Boeing, Airbus and Embraer.

Moreover, the persistent trade tensions between China and America continue to pose a threat for Boeing. Notably, as of June 30, 2025, Boeing had approximately 20 737-8 aircraft in inventory for customers in China, scheduled to be delivered by the end of this year. In case of any escalation of the trade tensions between the United States and China, the latter may refuse to take deliveries from Boeing, like it did in April 2025. This, in turn, would hurt BCA’s revenues and push up inventory cost for Boeing.

BA Stock’s Poor ROIC

The image below shows that BA stock’s trailing 12-month return on invested capital (ROIC) not only lags the peer group’s average return but also reflects a negative figure. This suggests that the company's investments are not yielding sufficient returns to cover its expenses.

BA Stock Trades at a Discount

In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.7X, a discount to the industry’s average of 2.31X. This suggests that investors will be paying a lower price than the company's expected sales growth compared to that of its peer group.
 

Its industry peers are also trading at a discount compared to the industry’s forward 12-month P/S. While Airbus Group is trading at forward 12-month sales of 1.99, ERJ is trading at 1.27.

What Should an Investor Do?

Despite holding an attractive valuation compared to its industry, Boeing’s poor ROIC and deteriorating earnings estimate movement might discourage new investors from adding this stock to their portfolio. 

Nevertheless, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering the company’s impressive near-term year-over-year sales and earnings growth projection, backed by solid backlog count. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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