Will Boeing Stock Soar in 2026 Despite 777X and Defense Delays?

Wall Street analysts are increasingly optimistic about Boeing stock. J.P. Morgan recently raised its price target to $245. The firm named the aerospace giant investment a top sector pick. This bullish view rests on near-term operational improvements. However, investors must consider longer-term concerns. These involve major commercial and and defense programs. The stock is up almost 21% as of 2025. This performance slightly beat the S&P 500 index. The success reflects work by CEO Kelly Ortberg and his team. Their focus was on the 737 MAX production ramp and deliveries.

The 737 MAX: A Strong Production Ramp

Stabilizing the 737 MAX production ramp was a key 2025 objective. Boeing stabilized production at 38 aircraft per month. The FAA approved a rate hike in mid-October. The new approved rate is 42 aircraft per month. Management plans to increase the rate by five aircraft every six months. This shifts the narrative for Boeing Commercial Airplanes (BCA). The rate could reach 52 aircraft per month by late 2026. This positive news flow is critical for the Boeing stock 2026 outlook. The 737 MAX order book exceeds 4,700 aircraft. Eating into this backlog is the main management objective.

Wide-body Headwinds: The 777X Delay

The 777X delivery delay presents a significant financial headwind. First delivery is now expected in early 2027. This pushes the timeline past the 2026 target. The original plan was for first delivery in 2020. This delay is emblematic of operational issues. The 777X is vital for the next wide-body cycle.

The delay was announced in October 2025. CEO Ortberg cited certification issues with the FAA in September. A technical issue with the GE Aerospace GE9X engine was reported in November. This issue reportedly suspended 777X flights. Boeing took a $4.9 billion noncash charge for the delay. A cash impact may occur in 2027. This could involve paying concessions to airline customers. The delay also costs cash by maintaining inventory longer. It requires keeping production lines open without deliveries. This delay impacts the cash flow outlook.

Defense Business: Progress and Persistent Risk

Returning the Defense, Space & Security (BDS) segment to profitability was a second key objective. BDS achieved a thin 1.9% operating profit margin. This was over the first nine months of 2025. This return to profitability is a welcome development. BDS has struggled with problematic fixed-price development programs. These programs led to multibillion-dollar charges over the years.

A key risk reminder came in December. The Air Force pushed back the first delivery of two Air Force One jets. This is one of four problematic programs. The delivery is now estimated for mid-2028. This pushback will likely result in further cash outflow. It reminds investors that issues persist in the defense segment.

Investment Outlook for Boeing Stock 2026

The outlook for Boeing in 2026 is generally positive. The 737 MAX production ramp is the primary driver. The potential for strong, positive news flow is high. The aerospace giant investment case is improving. Expectations for the 777X delivery delay are now lowered. The BDS segment is also making progress. Global aviation demand remains strong, according to IATA forecasts.

However, the execution record is not unblemished. Issues in BDS and with the 777X could recur in 2026. Therefore, the stock may not be a "top pick." It is perhaps better characterized as a cautious buy for Wall Street analysts. Investors should monitor execution closely. Stay informed with the latest commercial aviation news at flying.flights.