Boeing Co. (NYSE: BA) has been facing challenges in the stock market, with its shares declining approximately 6% since early September, in stark contrast to the S&P 500, which has seen a rise of 7%. This downturn has raised concerns ahead of the upcoming Q3 earnings report, scheduled for tomorrow. J.P. Morgan’s leading analyst, Seth Seifman, attributes the stock’s recent struggles to investor apprehension as they await the company’s financial disclosures.
Seifman, recognized as one of the top analysts on Wall Street, points to expectations of a significant charge related to Boeing’s 777X program as a contributing factor to the current caution among investors. Despite varying estimates, the scale of this potential charge remains unclear. It is anticipated that delays in the aircraft’s entry into service—catalyzed by prolonged testing and regulatory processes with the FAA—could lead to substantial financial ramifications. CEO Kelly Ortberg highlighted in a recent investor conference how even minor delays could result in considerable financial impacts, with Seifman estimating this charge could reach as high as $4 billion.
A critical aspect for Boeing’s stock to improve in the future hinges on a notable increase in free cash flow over the coming years. However, gauging this growth for 2026 presents challenges. With the anticipated delay in the 777X program impacting cash flow, Seifman has revised down his estimates for 2026 and 2027. This includes excluding ten expected deliveries of the 777X in 2026, thereby reflecting a revised outlook on customer deliveries and advance payments.
On a more optimistic note, Boeing has been experiencing positive momentum with its 737 and 787 deliveries. Recent reports indicate a significant increase in Q3 deliveries of the 737, and the FAA has approved a rise in production to 42 units per month, which is a positive sign for the company’s core business.
Ahead of the earnings announcement, Seifman is estimating a $4 billion charge for the 777X, although it is believed this will not heavily impact cash flow for the year. In light of adjustments made due to the delays, he has updated his cash flow projections to $3.75 billion and $8.5 billion for 2026 and 2027, respectively. Nevertheless, he maintains an optimistic outlook for Boeing, forecasting growth beyond 2027.
In his analysis, Seifman has assigned Boeing stock an Overweight rating, projecting a price target of $251, which suggests a potential upside of 12% from current levels. This optimistic perspective is echoed by most analysts covering the stock, with 12 out of 13 recommendations being positive, leading to a consensus rating of Strong Buy. The average price target of $258.91 indicates a favorable one-year gain of around 16%.
Investors are encouraged to conduct their own research and analysis, as the stock market remains unpredictable. Nevertheless, the outlook for Boeing remains hopeful, buoyed by strong performance in other aircraft models and a robust analyst consensus.