Is Boeing's Growth Still Shackled by Continued Problems in Its 737 Program?

The Boeing Company BA has successfully weathered much of the turbulence in its commercial aerospace segment since the pandemic, steadily charting a path toward recovery in recent quarters. However, its 737 MAX program remains under intense scrutiny as we progress in 2025, with the aerospace giant still grappling with lingering challenges that have constrained its growth trajectory.

Following the January 2024 door-plug detachment incident involving Alaska Airlines Flight 1282, the Federal Aviation Administration (“FAA”) imposed a cap of 38 737 jets per month. Boeing only reached this rate for the first time in May 2025. While CEO Kelly Ortberg has expressed confidence (as per major media reports) in raising production to 42 jets per month and eventually 47 by year-end, these targets appear too optimistic amid ongoing industry headwinds like labor shortages and parts supply constraints.

Notably, Spirit AeroSystems SPR, Boeing’s primary supplier of 737 fuselages, continues to face financial strain, operational inefficiencies and quality control issues, all of which had previously affected Boeing’s output and could once again delay production.

And even if we assume that these industry challenges do not worsen any further, the FAA’s increased oversight and stringent inspection regime add another layer of complexity. Whether Boeing will secure regulatory clearance in time to ramp up production thus remains uncertain.

While it is encouraging that Boeing delivered more 737s in first-quarter 2025 — boosting its commercial unit's revenue by 56.7% — questions remain about the sustainability of this growth under the shadow of regulatory, labor and supplier-related risks.

Does Supply Chain Remain a Concern for BA’s Peer?

The supply-chain constraints hampering the aerospace industry have affected almost all the industry players, with Boeing’s arch-rival, Airbus Group EADSY, being no exception. This European plane maker had to slash its production target for 2024, citing supply-chain issues as the prime reason behind it. 

However, recently Airbus appears to be managing supply-chain disruptions more effectively than Boeing, as reflected in its higher aircraft deliveries in first-quarter 2025. Notably, Airbus delivered 136 commercial aircraft in the first quarter compared with Boeing’s 130.

The Zacks Rundown for BA

Shares of Boeing have risen 20.6% year to date compared with the Zacks aerospace-defense industry’s growth of 25.5%.

From a valuation standpoint, BA is currently trading at a forward 12-month sales multiple of 1.80X, a roughly 17.4% discount when stacked up with the industry average of 2.18X.

The Zacks Consensus Estimate for BA’s 2025 and 2026 sales implies a year-over-year uptick of 25.6% and 16.2%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

BA stock currently carries a Zacks Rank #3 (Hold). 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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