| | | The Boeing Company (BA): A Bull Case Theory
Ricardo Pillai
Wed, October 22, 2025 We came across a bullish thesis on The Boeing Company on Boudreau Capital Newsletter’s Substack by Nicolas Boudreau. In this article, we will summarize the bulls’ thesis on BA. The Boeing Company's share was trading at $217.08 as of September 29th. BA’s forward P/E was 71.43 according to Yahoo Finance.
Boeing has faced significant challenges over the past several years, including COVID-19 disruptions, 737 Max 8 quality issues, and certification delays for the 777X and Max 7/10, but recent leadership changes under CEO Kelly Otterberg, appointed in August 2024, have set the stage for a turnaround. Otterberg’s mandate focused on resolving the commercial operations strike, improving aircraft quality, and advancing the 777X certification process.
H1 2025 results reflect early progress, with revenues up 26% to $42 billion and 280 commercial deliveries, led by 209 737 Max 8s. While commercial operating margins remain negative at –5.8%, this is a marked improvement from –17.4% in H1 2024, driven largely by steady 737 Max production, which is capped at 38 by the FAA but expected to rise to 42 later this year. Widebody production, particularly the 787, is ramping up toward 10 per month, while 767 and 777 freighters continue at stable rates through 2027.
On the defense side, Boeing is addressing historical fixed-cost contract risks by shifting to cost-plus agreements, exemplified by the F-47 fighter win, with margins in BDS expected to rise from 2.1% to 9–10%, aligning with peers like Lockheed Martin. Boeing Global Services remains a reliable cash generator with 19.9% margins on $10.4 billion revenue. Debt has been reduced to $44.6 billion from $52.5 billion in 2024, aided by a $10.55 billion sale of digital aviation solutions and an equity raise in 2024, while free cash flow is trending toward positive in Q4 2025.
Strategically, Boeing is reorienting its culture toward engineering excellence, retooling the C-suite, and pursuing critical certifications for the 777X and Max 10/7 variants. Combined with Spirit Aerospace acquisition for fuselage quality and Airbus production constraints, Boeing is poised to regain market share in widebody and single-aisle segments. With commercial margins improving and free cash flow set to accelerate, the stock presents a compelling upside of 40–60% over the next 2–3 years, underpinned by production ramps, certification milestones, and structural improvements across the business.
Previously we covered a bullish thesis on The Boeing Company (BA) by DeepValue Capital in March 2025, which highlighted its strong backlog, leadership changes under Kelly Otterberg, and potential for $10 billion in free cash flow. The company's stock has appreciated approximately by 22% since our coverage. The thesis still stands, and Nicolas Boudreau shares a similar perspective but emphasizes H1 2025 results, production ramps, and certification milestones as near-term catalysts.
finance.yahoo.com
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