Boeing Stock Rises 2.1% in a Month: Should You Hold or Fold the Stock?

Core Viewpoint - Boeing's shares have increased by 2.1% over the past month, contrasting with a 3.3% decline in the Zacks Aerospace-Defense industry, driven by strong demand in commercial, defense, and services sectors, along with significant contract wins and a robust backlog that enhances long-term revenue prospects [1][7]. Group 1: Company Performance - Boeing is one of the largest aircraft manufacturers in the U.S., benefiting from a growing demand in the commercial aerospace sector, with 161 net commercial airplane orders booked in the third quarter [4]. - The defense and space business outlook remains positive, with Boeing securing $9 billion in contracts in the third quarter of 2025, leading to a backlog of $76 billion for Boeing Defense, Space & Security [5][8]. - Recent contracts, including the production of 96 AH-64E Apache helicopters for Poland and a $2.47 billion contract for 15 KC-46A Pegasus tankers, are expected to significantly enhance Boeing's defense business and backlog [9][10]. Group 2: Market Position and Valuation - Boeing's forward 12-month price-to-sales ratio is 1.63X, which is lower than the industry average of 2.41X, indicating a more favorable pricing relative to expected sales growth compared to peers [19]. - The Zacks Consensus Estimate predicts a substantial increase in earnings per share (EPS) of 53.24% for 2025 and 110.15% for 2026, reflecting strong growth potential [14]. Group 3: Challenges - Despite strong growth potential, Boeing faces challenges such as supply-chain disruptions that have delayed aircraft deliveries and increased production costs, which may hinder the ability to fully capitalize on rising demand [12][13]. - The company's trailing 12-month return on invested capital (ROIC) is negative and below the peer group's average, indicating insufficient returns on investments [18].