Is Boeing (BA) a Buy in 2026 Amid a Credible Turnaround and Undervaluation?

The Boeing Company (BA) has long been a bellwether for the aerospace industry, but its recent financial struggles have left investors questioning whether the iconic manufacturer is a value opportunity or a cautionary tale. As 2026 approaches, the company's path to recovery-marked by a massive order backlog, structural cost reforms, and a resilient defense sector-has sparked renewed optimism. However, Boeing's ongoing operational challenges, including a $4.9 billion charge for the 777X program and a negative P/E ratio, demand a rigorous evaluation of its fundamentals. This analysis examines Boeing's financial health, competitive positioning, and industry dynamics to determine whether it warrants a "Buy" rating for value investors.

Financial Health and Valuation: A Tale of Two Boeings

Boeing's third-quarter 2025 results underscored the duality of its current position. While the company reported $23.3 billion in revenue, a $4.9 billion charge related to the 777X program led to a net loss of $5.34 billion. This has left Boeing with a trailing twelve-month (TTM) P/E ratio of -14.73 and an EPS of -$13.67, reflecting persistent earnings challenges. Yet, these metrics mask a more nuanced reality.

The company's price-to-sales (P/S) ratio of 2.27 suggests a valuation that is relatively modest compared to its revenue base, particularly when juxtaposed with its peers. Moreover, Boeing's order backlog-now at 6,616 unfilled planes-is a critical asset. Analysts project that this backlog will translate into robust cash flows as production rates for the 737 MAX and 787 programs stabilize. CFO Jay Malave has even hinted at positive free cash flow in 2026, with a long-term goal of reaching $10 billion in FCF once certification hurdles are resolved.

Structural Recovery and Operational Improvements

Boeing's recovery hinges on its ability to execute on structural reforms. The acquisition of Spirit AeroSystems, expected to strengthen quality control and vertical integration, is a key component of this strategy. Additionally, the company has made strides in reducing its debt burden. Fitch Ratings notes that Boeing plans to retire $7.95 billion in 2026 maturities, bringing gross debt below $50 billion. This aligns with S&P Global's projection that Boeing's free cash flow to debt will approach 20% in 2026, signaling progress toward healthier leverage ratios.

Operational efficiency is another area of focus. Boeing has ramped up production for the 737 and 787 programs, with the latter targeting 10 deliveries per month by 2026. These improvements are critical for regaining market share and addressing the $2 billion in projected cash burn for 2025. While challenges like the delayed 777X certification persist, the company's ability to absorb such costs without derailing its broader recovery is a testament to its resilience.

Industry Dynamics and Competitive Positioning

The aerospace sector is entering 2026 with unprecedented momentum. Record backlogs, easing supply chain pressures, and increased defense spending are creating tailwinds for both Boeing and Airbus. However, the competition between the two giants is intensifying. While Airbus currently leads in monthly deliveries-44 for Boeing versus 72 for Airbus in November 2025-Boeing has outpaced its rival in new orders. A landmark deal with Emirates for 65 777X aircraft has pushed Boeing's year-to-date orders to 1,000, compared to Airbus's 8,653 backlog as of September 2025.

Analysts project that Boeing will deliver 708 aircraft in 2026, up from 600 in 2024, while Airbus is expected to deliver 1,044 units according to Fitch. This gap highlights Boeing's potential to capitalize on its order momentum, particularly as it stabilizes production for the 737 MAX and 787 programs. Meanwhile, the defense segment-less cyclical and more resilient-offers a buffer against commercial sector volatility according to Deloitte.

Analyst Sentiment and Price Targets

Market sentiment toward Boeing is cautiously optimistic. TD Cowen's Gautam Khanna reiterated a "Buy" rating with a $240 price target, citing Boeing's "ramping plane production cadence" and underappreciated FCF growth potential. A broader consensus of "Strong Buy" from analysts, with a median price target of $250.00, suggests a 23.4% upside from its current price of $202.54. These targets imply that the market is pricing in a successful recovery, albeit with risks tied to the 777X program and labor shortages.

Conclusion: A Calculated Bet on Resilience

Boeing's 2026 prospects are a mix of promise and peril. On one hand, its massive order backlog, structural reforms, and improving FCF trajectory position it for a meaningful rebound. On the other, the company's recent losses, debt burden, and production challenges cannot be ignored. For value investors, the key question is whether Boeing's current valuation-anchored by a negative P/E but buoyed by a low P/S ratio-reflects a credible path to profitability.

The evidence suggests that Boeing is not a "buy" in the traditional sense of undervaluation but rather a speculative bet on its ability to execute a complex turnaround. Investors willing to tolerate short-term volatility may find the company's long-term potential compelling, particularly in a sector poised for growth. However, prudence dictates a cautious approach, with a focus on milestones such as 777X certification and debt reduction progress.