Boeing's Jet Delivery Surge: A Catalyst for Aerospace Sector Valuation Rebound

The Boeing Company's Q2 2025 performance has ignited optimism about its potential to catalyze a broader rebound in aerospace sector valuations. Delivering 150 commercial airplanes in the quarter—a 63% increase from Q2 2024—Boeing not only achieved its highest commercial jet deliveries since 2018 but also drove a 34.9% year-on-year revenue surge to $22.75 billion. This momentum has narrowed its GAAP loss per share to $0.92 from $2.33 and positioned the company to generate approximately $3 billion in free cash flow for 2025. Analysts argue that Boeing's operational stabilization and delivery acceleration could serve as a bellwether for the sector's recovery, particularly as global air travel demand and defense spending continue to rise.

Operational Turnaround and Financial Resilience

Boeing's Q2 results underscore a critical shift in its trajectory. The 63% surge in commercial jet deliveries—driven by increased 737 shipments—reflects improved production efficiency and supply chain coordination. This progress has translated into tangible financial improvements: the company's net loss narrowed to $612 million in Q2 2025 from $1.4 billion in the same period in 2024. Management's confidence in returning to positive free cash flow by Q4 2025 and net profit in 2026 further reinforces its turnaround narrative.

A discounted cash flow (DCF) analysis suggests Boeing is undervalued by 27.3%, with an intrinsic value of $324.06 per share. This valuation discount, coupled with a price-to-sales (P/S) ratio of 2.37x—aligned with industry benchmarks—positions the stock as a compelling opportunity for investors seeking exposure to the aerospace sector's long-term growth.

Broader Industry Tailwinds

The aerospace sector is poised for robust expansion in 2025, with market size projected to grow from $329.6 billion in 2024 to $348.31 billion in 2025, reflecting a 5.7% compound annual growth rate (CAGR). This growth is fueled by two key drivers:
1. Commercial Aviation: Global passenger traffic is expected to exceed 10 billion passengers in 2025, a 6% increase from 2024, pushing the airline industry toward $1 trillion in revenue.
2. Defense Spending: Geopolitical tensions have spurred defense budgets to surpass $2.4 trillion in 2023, with AI, advanced air mobility (AAM), and unmanned systems driving innovation.

Technological advancements, particularly in AI and digital tools for maintenance, repair, and overhaul (MRO) services, are enhancing operational efficiency and extending aircraft lifespans. These trends, combined with Boeing's $5,600-plane backlog, create a durable foundation for valuation growth.

Competitive Dynamics: Boeing vs. Airbus

While Airbus outpaced Boeing in 2024 deliveries (826 vs. 561), Boeing's valuation metrics highlight its long-term potential. The company trades at a 1.4x trailing revenue multiple, compared to Airbus's 1.9x, a discount attributed to Boeing's 30% stock decline in 2024 and 737 MAX challenges. However, Boeing's market cap of $177.46B in 2025 slightly exceeds Airbus's $164.24B.

Profitability remains a key divergence: Airbus reported a 2023 net profit of €1.20 per share, while Boeing posted a $3.67 loss. Yet Boeing's operating margin improved to -1.1% in 2023 from -22.3% in 2020, signaling progress. Analysts project Boeing's fair value at $242, suggesting its valuation discount could narrow as production stabilizes.

Investment Implications

Boeing's accelerating jet deliveries and broader industry tailwinds position it as a pivotal player in the aerospace sector's valuation rebound. While near-term challenges—such as supply chain bottlenecks and workforce constraints—persist, the company's operational improvements and strong backlog indicate a path to sustained growth. For investors, Boeing's undervalued shares and alignment with long-term industry trends present a compelling case, particularly as global air travel and defense demand continue to rise.