Boeing Shares Drop Amid Production Challenges
Boeing’s stock price fell to $198.20 on September 18, marking a 4.83% decline over the past week and nearly 13% year to date. The fall followed CEO Kelly Ortberg’s September 16 remarks at Morgan Stanley’s Laguna Conference, outlining ongoing production issues with the 737 and 787 programs and pushing 777X certification into 2027.
These developments have heightened investor caution as Boeing strives to demonstrate its turnaround. Despite this, Bank of America views the recent share price pullback as a buying opportunity, suggesting the stock is undervalued given Boeing’s long-term prospects.
Production and Certification Delays Impact Outlook
Ortberg reported that Boeing has not yet stabilized the 737 production line at its targeted 47 jets per month, primarily due to delays in producing wings internally. Meanwhile, certification testing for the 777X widebody aircraft has been extended into 2027, seven years behind schedule, partly due to an engine seal issue with the GE Aerospace GE9X turbine.
On a brighter note, the 737 MAX 10 variant is nearing certification with only three deliverables remaining. This model accounts for about 30% of Boeing’s 737 backlog, making its timely approval crucial for future revenue streams and cash flow generation.
Bank of America Analyst Sees Value in Boeing Stock
Ronald Epstein, aerospace analyst at Bank of America with over ten years of industry coverage, reiterated a Buy rating and set a $270 price target for Boeing shares. His target implies a 36% upside from the September 18 closing price, reflecting confidence in Boeing’s ongoing turnaround despite short-term setbacks.
Epstein described the market’s reaction to Ortberg’s comments as “a bit dramatic,” emphasizing that setbacks are expected in Boeing’s complex, highly regulated aerospace environment. He highlighted that Boeing’s turnaround is progressing broadly in the right direction, supported by increasing jet deliveries in 2026.
Labor Contract Negotiations Pose Near-Term Risk
Epstein identified the Society of Professional Engineering Employees in Aerospace (SPEEA) contract negotiations as a significant near-term risk. SPEEA represents approximately 17,000 engineers responsible for certification safety analysis, with the current agreement expiring on October 6, 2026.
Although Boeing and SPEEA reached a tentative four-year deal earlier in September, the final vote by members could lead to a strike if rejected. Such a strike would disrupt Boeing’s certification pipeline, potentially delaying deliveries and impacting cash flow forecasts.
Backlog and Delivery Pace Support Long-Term Confidence
Boeing’s order backlog topped $695 billion earlier this year, bolstered by fresh 737 MAX orders from carriers such as Turkish Airlines and Flydubai. This strong order book underpins future revenue but depends heavily on Boeing’s ability to deliver and certify aircraft on schedule.
Despite recent challenges, Boeing has maintained a delivery pace in 2026 not seen since 2018. Successful 737 MAX 10 certification and resolution of labor negotiations could improve market sentiment and validate current cash flow forecasts, which Bank of America estimates at $2.4 billion free cash flow for 2026.
Takeaway: Despite near-term production and labor challenges, Bank of America recommends buying Boeing shares at current prices, expecting a significant rebound as the aerospace giant advances its turnaround strategy.