Boeing Is Back in Buy-Point Territory. The Setup Is Not What the Headline Suggests

Boeing's 2024 was the trough year. The Alaska Airlines door plug incident in early 2024 reset the regulatory clock on 737 MAX production. The FAA cap on monthly production held the franchise's largest single revenue contributor below pre-incident levels for most of 2024. The 777X certification timeline slipped again. The defence segment absorbed cost overruns on multiple fixed-price programs.

2025 was the year the operational reset started to register. Revenue grew 14% on a quarterly basis as production rates recovered. The 737 MAX monthly production rate reached the 38-per-month FAA threshold for the first time post-incident. Cash flow turned positive on a quarterly basis after eighteen months of burn. The order book did not shrink.

That is the operating story. It is constructive. It is also not yet a buy-point story in the way the chart implies.

The technical pattern that IBD identified is a cup-with-handle base spanning roughly nine weeks, with the buy point in the $260-265 range. The Relative Strength rating has been improving. Volume on up-days has been outpacing volume on down-days for the past five weeks. Institutional accumulation, by the screens we track, has been positive for three of the past four months.

This is not a pure technical pattern. The chart is being supported by an actual operating recovery. The narrative around the chart is that the FAA cap is being relaxed, the production curve is steepening, and the cash flow inflection in 2026 is going to be larger than consensus models.

We think two of those three are right. The FAA relaxation is happening. The production curve is steepening. The cash flow inflection in 2026 is the part we are less certain about. Consensus has Boeing at roughly $11 billion in free cash flow for FY26. Achievable, but it requires the 777X certification to land in the first half and the 737 production rate to hit 50 per month. Both are plausible. Neither is committed.

The commercial aviation market is concentrated in two suppliers, Boeing and Airbus. Airbus has been operating at full production capacity through the entire post-pandemic recovery, which has created order book overflow that benefits Boeing structurally. Airline customers cannot wait the full Airbus delivery slot duration; the marginal incremental order is going to Boeing.

This is the structural support that the bull case relies on. As long as Airbus cannot expand production faster than the demand curve, Boeing collects share by default. The defence segment is more competitive but the commercial duopoly is the binding economic feature.

This dynamic supports a forward multiple in the 18-22x normalised earnings range. The question is what 'normalised' means. We model FY27 EPS at roughly $9.50 to $10.50, which against the current $250 stock price implies 24-26x. That is at the upper end of the duopoly support range, not below it.

The technical pattern can succeed even if the fundamental picture is fully priced. Buy points work because they reflect institutional accumulation that has been building for weeks. By the time the buy point is reached, the buying that drove the base formation has already digested the available float at lower prices.

The risk to the pattern is a fundamental disappointment. A 737 production setback, another quality incident, a 777X certification slip. Any of those reset the base formation and the buy-point thesis fails.

The last time Boeing broke out of a similar base pattern was 2017. The breakout worked for nearly two years before the MAX issues began. That is the bull reference point. The 2019 breakout, by contrast, failed within months as the MAX grounding extended. That is the bear reference point. The current setup looks more like 2017 than 2019, but the differentiator is whether the next two quarters deliver clean execution.