Boeing (BA) shares have fallen 15.4% over the past twelve months, significantly underperforming the S&P 500, which returned 17.0% over the same period.
The shortfall is not a demand problem, as Boeing carries a backlog of more than 6,200 undelivered airplanes representing a record $597 billion in commercial orders.
The real obstacle lies inside Boeing’s own factories, a reality management has openly acknowledged throughout the year.
Boeing’s 737 MAX assembly line is currently running behind schedule, with stabilization at a rate of 47 jets per month taking “longer than expected,” according to management comments made on September 16.
Wing production at one factory is causing a specific bottleneck, and Boeing says it has plans in place to address the holdup.
Reaching 47 jets per month is only the first phase of a broader manufacturing ramp, with management targeting 52 jets per month as the next planned milestone, stated during the July 28 second-quarter 2026 earnings call.
Executives warned on that same call that subsequent steps, moving from 52 to 57 jets per month and beyond, would prove even more difficult to execute.
Boeing has now fallen behind before reaching the production stages that management itself expected to be harder, compressing the timeline for meaningful cash generation.
External suppliers add another layer of risk, with management noting that supplier readiness, including engines, remains a critical factor in its 2027 production and delivery plans.
Boeing’s Commercial Airplanes segment, which generated $41.5 billion in fiscal 2025 and represented 46% of total company revenue, is still not profitable despite its enormous scale.
In the second quarter of 2026, Commercial Airplanes posted revenue of $11.8 billion, up 8% from a year earlier, yet the division still recorded an operating margin of negative 2.7%.
Management noted the 737 and 787 programs were operating only slightly above breakeven, largely because of pricing, with better-priced jets from the backlog expected to lift margins over time.
Boeing stock is currently trading 25.5% below its 52-week high, reflecting persistent investor concern over execution risk and financial leverage.
The company carries debt equal to 30.8% of its market value, compared with 21.0% for the broader S&P 500, leaving little margin for error if deliveries slip further.
On the July 28 call, management maintained its 2026 free cash flow outlook of $1 billion to $3 billion, with executives specifying that much of the expected cash would arrive late in the year from rising commercial delivery rates.
That guidance was issued before the September 16 commentary on the 737 delay, meaning the projection may no longer fully reflect current production realities.
Boeing’s third-quarter earnings report will be the next opportunity for management to address whether the 737 slowdown has forced a revision to that cash flow outlook.
A cut below $1 billion in free cash flow guidance would be a clear signal that slower deliveries are materially affecting Boeing’s financial position.
New orders have continued to arrive despite the production troubles, including 11 jets ordered by Biman Bangladesh Airlines on September 23 and ten 777 freighters ordered by Ethiopian Airlines on September 30.
The fundamental risk for investors is one of timing, as factory delays do not erase Boeing’s backlog but do push back the point at which billions in committed revenue actually convert to cash.
