Boeing Stock Surges 2.2% in a Month: What Should Investors Know?

The Boeing Company’s BA shares have rallied 2.2% in a month compared with the Zacks Aerospace-Defense industry’s growth of 3%. The company remains one of the largest U.S. commercial aircraft manufacturers. Steadily growing commercial air travel should boost Boeing’s service business unit. The outlook for Boeing’s defense and space business segment also remains optimistic.
 

In particular, the current U.S. government’s inclination toward strengthening the nation’s defense and space system should act as a growth catalyst for Boeing and other defense stocks, such as General Dynamics GD and Northrop Grumman NOC. Shares of General Dynamics have declined 0.1% while those of Northrop Grumman have risen 15.3% during the same time frame.

Let's examine the factors that contributed to the share price gain and assess the stock's investment prospects to make an informed decision.

Factors Acting in Favor of BA

Boeing continues to benefit from strong demand in commercial aerospace, reflected in solid aircraft orders and deliveries, while its defense and space businesses also maintain a positive outlook given its leading global contractor position.

During the fourth quarter of 2025, the company booked 336 net commercial airplane orders. Such solid order activities should continue to bolster revenue performance for Boeing’s commercial business over the long run. During the fourth quarter of 2025, the Boeing Defense, Space & Security (“BDS”) unit booked $15 billion in orders, including contracts for 15 KC-46A tankers from the U.S. Air Force and 96 Apaches from Poland, which resulted in a solid backlog amount of $85 billion for this segment as of Dec. 31, 2025. Such solid contract wins and subsequent backlog count should continue to bolster the BDS unit’s revenues. The unit’s top line reflected solid year-over-year growth of 37% in the fourth quarter.

In February 2026, Boeing and Air Cambodia announced the airline's largest single-aisle order for up to 20 737 MAX airplanes. Boeing will benefit from this order through added commercial aircraft revenues and a stronger order backlog, while also securing a new airline customer in the fast-growing Southeast Asian aviation market.

In January 2026, Boeing and Alaska Airlines announced the carrier's largest-ever airplane order. This order will also significantly benefit Boeing by boosting its order backlog and improving long-term revenue visibility, while also reinforcing demand for its 737 and 787 programs.

Challenges Faced by BA

While Boeing presents strong growth potential, it also faces several key challenges that investors should weigh carefully. Although global air travel demand continues to recover and expand, the aviation industry remains constrained by persistent supply-chain disruptions, including shortages of engines, castings and other critical components.

These bottlenecks have delayed aircraft deliveries and increased production costs, limiting manufacturers’ ability to fully capitalize on rising demand. During 2025, aircraft order cancellations totaled $11.09 billion, mainly for 777X, 737, and 787 models, which impacted the revenue potential of the Boeing Commercial Airplanes segment.

BA Stock’s Estimates

The Zacks Consensus Estimate for 2026 earnings per share (EPS) has decreased 37.11% in the past 60 days. BA’s long-term (three to five years) earnings growth rate is 31.33%.
 

The Zacks Consensus Estimate for General Dynamics’ 2026 EPS has decreased 2.7% in the past 60 days. GD’s long-term earnings growth rate is 10.3%. The consensus estimate for Northrop Grumman’s 2026 EPS has decreased 1.8% in the past 60 days. NOC’s long-term earnings growth rate is 4.8%.

BA’s Earnings Surprise History

The company beat on earnings in two of the trailing four quarters and missed in the other two, delivering an average negative surprise of 80.4%.

BA’s ROE Higher Than the Industry

Boeing’s trailing 12-month return on equity of 360.39% is higher than the industry average of 10.99%. Return on equity, a profitability measure, reflects how effectively a company utilizes its shareholders’ funds to generate income.

BA Stock’s Valuation

In terms of valuation, Boeing’s trailing 12-month price/book (P/B) is 32.51X, a premium to the industry’s average of 6.96X.

What Should an Investor Do?

Boeing is benefiting from strong demand across its commercial, defense and space businesses, with robust aircraft orders driving revenue growth and expanding backlogs in both commercial airplanes and the BDS segment. Recent major contract wins strengthen Boeing’s backlog, market presence and long-term revenue visibility.

However, considering its negative earnings estimates and higher valuation, new investors should wait and look for a better entry point. Those who already have this Zacks Rank #3 (Hold) stock in their portfolio may continue to retain it, considering the company’s long-term growth projection and higher ROE. 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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