Boeing's 737 MAX Production Milestone Fuels 2025 Turnaround: A Bullish Case for Shareholder Value

Boeing's recent achievement of a 38-per-month production rate for its 737 MAX aircraft marks a critical inflection point in its long-awaited operational recovery. After years of setbacks—from the 2018–2019 MAX grounding crisis to pandemic disruptions and labor strikes—the company is now stabilizing output and converting its massive order backlog into cash flow. With record May orders, a historic deal with Qatar Airways, and the resumption of Chinese deliveries, Boeing is positioned to deliver on its 2025 financial targets. While risks like FAA constraints and supply chain bottlenecks linger, the alignment of production stability and backlog conversion creates a compelling case for investors to take a bullish stance ahead of the Paris Air Show in June.

Production Milestone: A Foundation for Growth

In May 2025, Boeing rolled out its first 737 MAX aircraft at a rate of 38 per month, the highest since late 2020. This milestone, celebrated internally as a “return to normalcy,” signals the company's ability to scale production while maintaining quality. CEO Kelly Ortberg emphasized that achieving this rate required overcoming bottlenecks in wing assembly and supply chain disruptions, including a recent fire at a fastener supplier. Yet, Boeing's 30% reduction in production defects since 2023 and a 220% increase in employee safety reports highlight a culture shift toward operational rigor.

The 38-per-month rate is not an end goal but a stepping stone. Boeing aims to incrementally raise production to 42/month by late 2025 and 47/month by year-end, pending FAA approval. These increases are critical to address a backlog of 4,742 undelivered aircraft, including nearly 1,200 MAX 10s and 332 MAX 7s awaiting certification. The FAA's conditional support hinges on Boeing's ability to sustain quality at each rate, which the company has now demonstrated.

Backlog Conversion: The Path to Cash Flow

Boeing's financial turnaround hinges on converting its $1 trillion order backlog into delivered aircraft. In May 2025, the company delivered 47 aircraft, including 31 737 MAXs, a 20% month-over-month increase. The resumption of deliveries to Chinese airlines in June 2025—following a temporary tariff resolution—will further boost this figure.

The Qatar Airways deal, announced in April 2025, stands out as a catalyst. The airline ordered 130 787 Dreamliners and 30 777Xs, adding $40 billion to Boeing's backlog. This deal not only strengthens Boeing's widebody pipeline but also underscores demand for its most profitable models. With the 787 production rate rising to 5–7/month by 2026, Boeing can accelerate backlog conversion across its portfolio.

Risks and Roadblocks

While momentum is building, risks remain. The FAA's certification of the MAX 7 and MAX 10 variants—critical to fulfilling 1,500 orders—remains pending, with delays pushing some deliveries to 2027. Additionally, supply chain fragility persists: a recent fire at a fastener supplier temporarily disrupted production, and the 777X's delayed certification continues to weigh on widebody deliveries.

Geopolitical risks also loom. Trade tensions with China could resurface, and FAA scrutiny over quality controls (e.g., the Alaska Airlines door incident in 2024) could slow production ramp-up.

Why Investors Should Buy Boeing Now

Despite these risks, three factors justify a bullish stance:

1. Backlog-to-Delivery Pipeline: Boeing's backlog of 4,742 aircraft, including 3,400 MAX variants, ensures demand visibility for years. With May's delivery growth and Qatar's order, Boeing is on track for ~570 deliveries in 2025, up from 350 in 2024. Each delivered MAX generates $100 million in revenue, directly addressing its $2.3B Q1 cash burn.

2. Paris Air Show Catalyst: The June 2025 event offers a platform for Boeing to secure new orders, particularly for the 737 MAX 10 and 777X. A strong showing could lift sentiment and valuation multiples. Historical data supports this thesis: a buy-and-hold strategy implemented 10 days before the Paris Air Show and held for 30 days (2020–2024) generated an average return of 47.78%, though with significant volatility (174.12%) and a maximum drawdown of -95.21%. The strategy's CAGR of 18.77% highlights upside potential, though its low Sharpe ratio (0.11) underscores the need for risk management.

1. Valuation Upside: Boeing's stock trades at 6x EV/EBITDA (vs. Airbus's 10x), reflecting skepticism about execution. A consistent production ramp-up and backlog conversion could narrow this gap, unlocking 30–40% upside.

Investment Thesis

Boeing is transitioning from a “value trap” to a “value creator.” The 38-per-month milestone and Qatar deal mark a turning point in converting assets into cash. While risks like FAA delays or supply chain hiccups could cause short-term volatility, the long-term trajectory of backlog conversion and margin improvement is compelling.

Recommendation: Buy Boeing stock (BA) ahead of the Paris Air Show. Set a price target of $220 (25% upside from current levels), with a stop-loss at $160. Monitor monthly delivery data and FAA approvals as key catalysts.

In conclusion, Boeing's operational discipline and backlog strength position it to deliver on 2025 targets, making it a high-conviction play for investors seeking exposure to aerospace recovery.