Boeing (BA) stock carries the richest valuation multiple among its aerospace and defense peers, even as its profitability and twelve-month returns disappoint investors.
The company posted revenue growth of 25% over the last twelve months, outpacing every major competitor in its peer group by a wide margin.
Despite that top-line momentum, Boeing’s stock delivered a negative 0.7% return over the past year, making it the only company in the group to post a loss for shareholders.
The valuation gap becomes especially striking when Boeing is placed side by side with Lockheed Martin (LMT), a direct rival with a far cleaner earnings picture.
Boeing trades at 75.2 times trailing earnings compared to Lockheed Martin’s 22.3 times, a gap that demands serious scrutiny from any investor considering the stock.
Boeing’s positive net income of $2.44 billion over the last twelve months was largely driven by an $8.22 billion one-time accounting gain, masking a core operating loss of $5.10 billion.
That translates to an operating margin of negative 5.4%, while Lockheed Martin generated a clean 11.9% operating margin to support its much lower multiple.
Lockheed Martin returned 41% to shareholders over the past twelve months, General Dynamics returned 27%, and RTX delivered 46%, leaving Boeing as the clear underperformer of the group.
The market is pricing Boeing not on what it earns today, but on what it could earn if a complex operational recovery goes according to plan.
Management recently highlighted that the company is “increasing production and delivering at levels we have not seen since 2018,” signaling genuine momentum in its production ramp.
The 737 program sits at the center of that effort, with the company “ramping to 47 airplanes per month” as it works to convert a record backlog into actual deliveries and cash flow.
Boeing’s total backlog stands at $715 billion, providing clear long-term demand visibility that helps explain why investors are willing to pay such a substantial forward premium.
However, execution risk remains a serious concern, particularly given supply chain vulnerabilities that have already begun to surface in recent quarters.
On its latest earnings call, management acknowledged that for the 787 program, the company has “fallen behind deliveries in the first half of the year” on engines, pointing to a significant bottleneck.
Management was direct in stating that an “improved recovery on engines” from supplier GE “will be important for our rate 10 timing,” underscoring just how dependent the recovery is on outside partners.
GE Aerospace (GE), which itself posted 22% revenue growth and an 18.7% operating margin, represents a key variable in Boeing’s ability to hit its widebody production targets on schedule.
The 787 program’s delivery trajectory will serve as the most immediate and visible test of whether Boeing’s supply chain can actually handle the pressure being placed on it.
Bulls argue that the production ramp, if sustained, will generate the cash flow and earnings needed to eventually justify a premium multiple that currently looks stretched by every conventional measure.
Bears counter that the high multiple leaves almost no room for error, and that any further supply chain disruption could quickly erode the market’s confidence in the turnaround story.
For investors who find the sector compelling but are uncomfortable with single-company execution risk, broader exposure through an aerospace and defense ETF like ITA offers an alternative approach.
The central question surrounding Boeing is straightforward: the backlog is real, the growth is real, but whether the company can convert both into durable profitability remains entirely unproven.
