TLDR
- Bernstein selects Boeing as number one Aerospace & Defense stock for 2026 with $298 price target
- 737 output at 42 planes monthly while 787 produces 8 units per month with rates climbing
- Analysts project free cash flow surpassing $11 billion in 2028 from current low single-digits
- Existing order backlog means only 50% of 737 and 787 orders delivered through 2030
- Defense business returning to positive cash generation in 2027 after F-47 program win
Bernstein selected Boeing as its top Aerospace & Defense investment for 2026. The firm lifted its price target to $298 from $277 while keeping an Outperform rating.
The aerospace manufacturer trades at $242.61. The new target implies 23% upside potential from current levels.
Analysts at Bernstein see Boeing’s multi-year recovery gaining real momentum. Douglas Harned and his team believe the market will see demand exceed supply throughout the decade.
Boeing has a track record of rapid movement once investor confidence builds around production increases. Progress on key aircraft programs becomes crucial for stock appreciation.
The company now produces 737 aircraft at a rate of 42 per month. The 787 program runs at 8 aircraft monthly.
Backlog Creates Long Runway
Boeing’s order backlog presents a compelling growth story. Even by 2030, the company will have delivered just half of current 737 and 787 orders.
This calculation excludes future orders expected over the next several years. The 777X backlog remains virtually untouched.
Production rates are scheduled to increase over the next five years. Bernstein expects margins and cash generation to expand alongside rising output.
Investor concerns surfaced in the fourth quarter around cash flow. The 777X certification faced delays while capital expenditure increased for facility expansion.
Bernstein views the stock pullback as an entry point. The 777X issues are timing-related according to the firm. The higher capital spending is necessary given the massive backlog.
Management provided guidance for low single-digit billions in free cash flow for 2026. A $700 million Department of Justice payment creates a headwind this year.
Cash Generation Set to Accelerate
The picture improves dramatically in subsequent years. Bernstein forecasts free cash flow exceeding $11 billion by 2028.
Inventories will unwind as production rates climb. This combination drives the sharp improvement in cash generation.
Defense operations show signs of stabilization. Years of charges that pressured cash flow appear largely resolved.
The F-47 program win should inject new energy into Boeing Defense. Bernstein projects the defense segment achieves positive cash generation in 2027.
Boeing Global Services continues delivering strong results. High margins persist thanks to aftermarket demand and growing commercial business.
Recent Delivery Numbers
The company delivered 600 aircraft in 2025. This represented a 72% jump and the highest total since 2018.
Boeing secured 1,075 net new orders last year. This topped Airbus for the first time in seven years as the rival captured 889 orders.
Quarter four deliveries totaled 160 commercial aircraft. These included various 737, 767, 777, and 787 Dreamliner configurations.
Delta Air Lines ordered up to 60 Boeing 787 Dreamliners. The deal includes 30 firm 787-10 orders plus 30 options.
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