Are You Sure You Understand Boeing Stock’s Risk?
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Shares of Boeing (BA) have declined 27.8% over the past three months, compared with a 1.7% drop for the S&P 500. The stock took its biggest hit on October 27, falling 10.7% on the day of its third-quarter report. With management pointing to a record $745 billion backlog, you might assume most of the risk is already out of the shares. So how has Boeing stock held up when the whole market sold off?
Boeing Stock Has Usually Fallen Further Than The Market
Boeing shares have declined an average of 23.6% across 15 market shocks since 2007, compared with a 15.8% drop for the S&P 500 over those same windows. The stock recorded its steepest loss during the COVID-19 shock of 2020, falling 72% alongside a 34% drop for the broader index. During the 2008-2009 Global Financial Crisis, Boeing shares fell 66%, against 53% for the S&P 500.
Recovering from these lows has also taken time. The median rebound from a shock low required 8.1 months, though three recoveries lasted more than a year, including 48.1 months following the 2008-2009 crisis. The stock has not returned to its level prior to the 2020 shock, and its latest close is 48.8% below its February 2020 peak.
Boeing Is Selling More But Barely Breaking Even
Boeing generated $94.9 billion in revenue over the twelve months to September 2026, a 17.5% increase. The company still posted a $165 million operating loss, although that was much smaller than the $8.4 billion operating loss reported a year earlier. While Boeing reported a net profit for the twelve months, a single quarter, the three months to December 2025, produced an $8.22 billion net profit on an $815 million operating loss. That single quarter generated a larger profit than the $7.66 billion net profit for the entire twelve months, so the other three quarters together lost money.
The company also carries more debt relative to its size than the broader S&P 500, with debt equaling 33.4% of its market value compared with 19.2% for the index. Over their latest twelve months, peers RTX and Lockheed Martin each achieved an operating margin of 11.8%, while Boeing’s operating margin sat close to zero.
Boeing’s Jet Production Is Behind Its Own Targets
On the October 27 call, management said that establishing a fully stable 737 production rate of 47 jets a month is taking longer than expected and will run into 2027. Management plans the next step, a rate of 52 a month, for the second half of 2027. Management expects this slow progress toward stable output at 47 a month to leave 2026 deliveries short of its 500 target.
Delays extend beyond the 737 program. Management expects 2026 deliveries for the 787 to finish near the low end of its range of 90 to 100. Additionally, a wing parts supplier disrupted production on the 777 freighter and 767 tanker lines, and management said the cost of that disruption will be booked as abnormal expense over the next few quarters.
The company is also facing pressure on cash. Management expects about $3 billion of free cash flow in 2027, a year it said will be weighed down significantly by legacy cash costs. On the other side, management said no airline has asked to rework its order plans so far, though it is watching whether high fuel prices slow airline growth.
Boeing is expected to report next in January 2027, when management said it will detail its delivery plans program by program.
Still Holding Boeing After The Drop?
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