Hold Boeing Stock? Here's the 1 Thing Long-Term Investors Need to Focus On

Boeing’s journey from its post-pandemic resurgence to its current crossroads offers a stark lesson in the aviation industry’s fragility—and resilience. With a $521 billion commercial aircraft backlog and a defense portfolio worth $460 billion, the company has the raw materials for a comeback. Yet, its ability to turn this potential into profit hinges on one critical factor: executing its production ramp-up plans while navigating regulatory hurdles and cost pressures. This is the linchpin for long-term investors.

Why Production Matters More Than Ever

Boeing’s order backlog, driven by deals like the 200 737 MAX jets for VietJet and 100 737 MAX-10s for Pegasus Airlines, represents a decade of future revenue. But fulfilling these orders depends on its ability to increase production rates for its flagship models. The company aims to boost 737 MAX output to 42 planes per month and 787 Dreamliners to 7 per month by late 2025. These targets are not just about volume—they’re about reducing inventory backlogs (currently 55 stored 737 MAXs and 25 rework-queued 787s) and easing a $87.5 billion inventory burden.

The Regulatory Gauntlet

Yet, Boeing’s production plans face headwinds. The FAA’s delayed approval for 787 seat certifications and lingering scrutiny over safety—exemplified by the 2024 Alaska Airlines fuselage incident—have already capped 737 MAX output and eroded public trust. These bottlenecks aren’t just operational; they’re existential. A 14-point decline in public trust and a 26-point drop among business travelers underscores reputational damage that could stall future sales.

Meanwhile, geopolitical risks loom. U.S. tariffs on Indian-sourced materials (adding a 7% cost increase for 787s) and retaliatory tariffs from China threaten to derail delivery schedules and pricing. Boeing’s path to profitability requires not just building planes faster but doing so without triggering further regulatory or market backlash.

The Financial Tightrope

Boeing’s financial health reinforces why production execution is non-negotiable. Despite a $50 billion order surge in early 2025, its 2024 net loss hit $11.82 billion, a 434% jump from 2023. Even in Q1 2025, free cash flow remained negative ($2.3 billion), though improved from prior years. The company’s $53.6 billion debt load demands a return to positive cash flow by late 2025—a goal that hinges on delivering aircraft on schedule and at cost.

The Defense Diversion

While commercial aviation struggles, Boeing’s defense division offers a lifeline. The $62 billion F-47 sixth-gen fighter jet program and $134 million South Korea P-8A deal provide stable, long-term revenue. This diversification is critical, as defense contracts now account for nearly half of Boeing’s backlog. Yet, investors must weigh whether defense can offset commercial aviation’s volatility—or if it’s merely a stopgap.

The Bottom Line: Why This Matters for Investors

Long-term investors in Boeing must focus on whether the company can scale production while managing regulatory risks and costs. The stakes are clear:
- A successful 737 MAX ramp to 42/month and 787 output increase would clear inventory, boost cash flow, and reduce debt.
- Failure risks further delays, eroding backlog value and worsening losses.
- Regulatory approvals and safety improvements are non-negotiable for restoring trust—and securing future orders.

Consider the data: Boeing’s backlog is $521 billion, but its 2024 deliveries fell to 348 aircraft, down 34% from 2023. Compare this to Airbus, which delivered 766 narrowbodies in the same period and saw a +28% quarterly profit jump in 2025. Boeing’s path to parity demands flawless execution.

Conclusion: The Production Pivot Determines Boeing’s Future

Boeing’s long-term prospects hinge on its ability to produce aircraft at targeted rates while resolving regulatory and cost issues. If it succeeds, the backlog will fuel recovery, debt will shrink, and its defense bets could pay off handsomely. If it fails, the company risks becoming a cautionary tale of missed opportunities.

Investors should monitor two key metrics:
1. 737 MAX and 787 production rates (targeted 42 and 7/month by late 2025).
2. Free cash flow trends, ideally turning positive by year-end.

With a $50 billion order boost and CEO Kelly Ortberg’s focus on operational discipline, Boeing has the tools to turn the tide. The question is execution—because without it, even the largest backlog in aviation history won’t matter.

The verdict? Boeing’s future is in its hands—and long-term investors must bet on whether it can finally get the production equation right.