Is Boeing's Recent Rally a Sustainable Entry Point for Long-Term Investors?

The recent surge in Boeing (BA) shares, fueled by a price target upgrade from JPMorgan and improving operational metrics, has reignited debates about the stock's long-term potential. For investors weighing the risk/reward proposition, the key lies in dissecting Boeing's strategic positioning within the aerospace sector, its path to free cash flow positivity, and how its valuation stacks up against industry peers.

JPMorgan's Upgrade: A Vote of Confidence

JPMorgan analyst Seth Seifman recently raised Boeing's price target from $240 to $245 per share, maintaining an "overweight" rating according to reports. This $5 increase implies a potential 13.99% upside from Boeing's previous closing price, signaling confidence in the company's ability to scale production and deliveries as data shows. The upgrade, though modest, aligns with broader analyst optimism: Boeing's stock climbed 2.6% following the announcement, outperforming the average price target of $233.17 set by MarketBeat according to reports. JPMorgan's rationale hinges on Boeing's capacity to leverage its commercial jet production ramp-up, particularly for the 737 MAX and 787 Dreamliner, to drive revenue growth as analysts note.

Delivery and Cash Flow Momentum

Boeing's recent operational progress is critical to its valuation story. The company expects to return to positive free cash flow in 2026, with CFO Jay Malave projecting "low single digits" in billions of dollars in free cash flow next year according to the company. This reversal from a $2 billion cash outflow in 2025 is underpinned by increased commercial jet deliveries and production rate improvements. For instance, Boeing's 737 MAX production has reached 42 units per month after FAA approval as reported, a significant step toward closing the gap with Airbus, which aims to deliver 820 commercial aircraft in 2025 according to industry analysis. While Boeing's 2025 delivery estimates (590–610 aircraft) trail Airbus's year-to-date total of 585, the company's production stabilization and inventory reduction efforts are gaining traction as data shows.

Sector Momentum and Competitive Positioning

The aerospace sector's Q4 2025 performance underscores its resilience. Commercial services grew by 29%, driven by robust air traffic and maintenance, repair, and overhaul (MRO) demand according to reports. Defense OEM sales surged 38%, reflecting strong demand for defense products as data shows. Boeing, as a key player in both commercial and defense segments, benefits from this dual tailwind. Its defense business, which saw a 38% sales increase in Q4 2025, is particularly well-positioned amid global defense spending trends according to reports. Meanwhile, Airbus faces its own challenges, including supply chain bottlenecks that could hinder its 2025 delivery target according to industry analysis. This creates a window for Boeing to close the gap, especially as the FAA's removal of production caps on the 737 MAX accelerates output as analysts indicate.

Valuation Attractiveness: Undervalued or Overhyped?

Boeing's valuation appears compelling relative to industry benchmarks. Analysts suggest the stock is undervalued by 32.1% based on a discounted cash flow (DCF) analysis, with a fair price-to-sales (P/S) ratio of 1.92x versus its current 2.19x according to financial models. While this suggests a slight premium, it is offset by Boeing's projected free cash flow recovery. In comparison, aerospace peers in Q4 2025 traded at varying EBITDA multiples, with military and defense firms commanding up to 14.7x EBITDA for companies with $5–15M in earnings according to industry data. Boeing's EV/EBITDA multiple, though not explicitly stated, likely falls within a competitive range given its hybrid exposure to commercial and defense markets.

Risks and Realities

Despite the positives, Boeing's path to sustainability is not without hurdles. The company reported a GAAP loss of $5.46 per share in Q4 2025, with core non-GAAP losses at $5.90 per share according to financial reports. While positive cash flow is anticipated for the quarter, potential liabilities-such as a possible DOJ payment-remain unresolved according to analysts. Additionally, supply chain disruptions and regulatory scrutiny continue to weigh on production timelines according to reports. For long-term investors, these risks must be balanced against Boeing's structural advantages, including its dominant position in the 737 MAX market and its alignment with defense sector growth.

Is the Current Pullback a Buy Opportunity?

Boeing's stock has pulled back from its 52-week high of $242.63, trading near the top of its range and above its 200-day moving average according to market data. This creates a potentially attractive entry point for investors who can tolerate near-term volatility. With 52 "buy" ratings out of 71 from analysts according to analyst sentiment, the stock's risk/reward profile appears favorable, particularly for those with a multi-year horizon. The aerospace sector's growth trajectory-bolstered by defense spending, technological innovation, and commercial demand-further supports a bullish case according to industry analysis.

Conclusion

Boeing's recent rally, driven by JPMorgan's upgrade and operational improvements, reflects a confluence of sector momentum and valuation appeal. While challenges persist, the company's path to free cash flow positivity in 2026, combined with its competitive positioning against Airbus and a favorable industry backdrop, suggests the current pullback could be a sustainable entry point for long-term investors. As always, due diligence on execution risks-such as production bottlenecks and regulatory hurdles-remains essential.