Boeing Opens New Defense-Focused R&D Facility: Should You Buy the Stock Now?

Core Insights - Boeing has opened a new 65,000-square-foot Engineering Center at Embry-Riddle Aeronautical University to enhance defense programs and create 400 high-paying jobs [1][9] - The company is focusing on long-term growth and stable defense revenues, which may attract investors [2] - Boeing's stock has increased by 24.3% year-to-date, underperforming the aerospace-defense industry and broader sector but outperforming the S&P 500 [3] Company Performance - Boeing's commercial airplanes segment saw a 63% year-over-year growth in delivery count for Q2 2025, leading to an 81% increase in revenues for this unit [5][9] - The company anticipates a demand for 43,600 new commercial planes through 2044, driven by a projected annual passenger traffic growth of 4.2% [6] - The defense segment contributes 36% to Boeing's total revenues as of the end of 2024 [7] Future Outlook - The U.S. fiscal 2026 defense budget proposal includes $3.1 billion for F-15EX Eagle II production and $3.5 billion for the F-47 Next Generation Air Dominance fighter jet, which is expected to benefit Boeing's defense unit [10] - The long-term earnings growth rate estimate for Boeing is 17.9%, higher than the industry's 14.5% [11] Sales and Earnings Estimates - The Zacks consensus estimate for Boeing's Q3 2025 sales suggests a 19.7% improvement year-over-year, with full-year 2025 sales expected to rise by 28.8% [13] - Earnings estimates for the current quarter and next year indicate significant year-over-year growth, with a projected 203.93% increase for the next year [15] Challenges - Supply chain challenges and part shortages are causing delays in jet production, contributing to a backlog of 17,000 aircraft as of June 2025 [17] - Trade tensions with China pose risks, as approximately 20 737-8 aircraft are awaiting delivery to Chinese customers, which could impact revenues [17] Investment Considerations - Boeing's trailing 12-month return on invested capital (ROIC) is negative and lags behind industry peers, indicating insufficient returns on investments [18][20] - Despite recent operational successes, Boeing's negative ROIC and downward earnings revisions suggest a cautious investment approach [22]