The Boeing Company BA recently secured a contract from China Airlines to deliver 10 777-9 passenger and four 777-8 Freighter airplanes. Additionally, the airline has options to purchase five 777-9s and four 777-8 Freighter jets.

With global customers having ordered more than 520 777X airplanes to date, Boeing’s proven prowess in the commercial aerospace market is further strengthened, ensuring its long-term revenue stability. This, in turn, might encourage investors interested in aerospace stocks to add this American jet manufacturer to their portfolio.

However, before adding a stock to one’s portfolio, one must consider other parameters like share price performance, opportunities as well as risks (if any) to investing in the same.

BA Stock Beats Industry, Sector & S&P 500

Shares of Boeing have surged 12% over the year-to-date period, outperforming the S&P 500’s loss of 4.4%. The stock also beat the Zacks aerospace-defense industry’s rise of 10.8% and the broader Zacks Aerospace sector’s growth of 9.7% in the said time frame.Zacks Investment Research

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Shares of other aerospace bigwigs like Embraer ERJ and Airbus EADSY have also risen considerably over the year-to-date period. Notably, shares of Embraer and Airbus have gained 31% and 10.5%, respectively.

What’s Favoring BA Stock?

This aerospace manufacturer has been making headlines since the beginning of the year, driven by a series of contract wins across both commercial and defense sectors, as well as several valuable partnership agreements. Together, these developments (expected to strengthen the company’s resilience during periods of economic or geopolitical uncertainty) must have reinstated investors’ confidence in BA, which got duly reflected in its year-to-date share price hike.

Notably, Boeing began its 2025 media account with the announcement of a strategic partnership with Norsk e-Fuel in January, which enables it to invest in the production and availability of sustainable aviation fuel (SAF). In the next month, Boeing secured an order from the Japan Self-Defense Forces for the supply of 17 CH-47 Block II Chinook helicopters.

In March, Japan Airlines offered a contract to Boeing to deliver 17 of its 737-8 jets, and BOC Aviation issued an order for the supply of 50 737-8 jets. In April, Boeing signed an agreement to sell portions of its Digital Aviation Solutions business, including its Jeppesen, ForeFlight, AerData and OzRunways assets, to Thoma Bravo for cash worth $10.55 billion.

What Lies Ahead for BA Stock?

Rising air travel and an aging global fleet are driving demand for new jets and aftermarket services, which likely contributed to Boeing Global Services (BGS) unit generating a solid $5.1 billion in revenues in the first quarter of 2025. Future growth for Boeing in this market looks promising, with the company’s upcoming aircraft offering 25-40% better fuel efficiency and lower emissions. With a strong $22.04 billion backlog, as of March 31, 2025, the BGS unit is well-positioned for sustained long-term expansion.

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In fact, the rapidly growing commercial air travel also bodes well for other aerospace giants like Embraer and Airbus, both of which actively serve the commercial aftermarket services market through their Embraer Services & Support and Airbus Services units, respectively.

Boeing’s long-term defense outlook also remains strong, supported by rising U.S. defense spending and major program involvement, such as the F-47 Next Generation Air Dominance platform. In the first quarter of 2025, its defense unit secured $4 billion in contracts, taking the backlog to $61.57 billion. Continued innovation, evident from its progress on the MQ-25 program, and strong government support signal strong growth potential for Boeing’s defense offerings in the years ahead.

In line with this, the consensus estimate for BA’s long-term (three-to-five years) earnings growth rate is pegged at 17.9%, higher than the industry’s 11.5%. 
Now, let’s take a sneak peek at the company’s near-term estimates to understand whether the figures mirror similar growth prospects.

BA Stock’s Estimates

Boeing’s estimate for second-quarter 2025 sales suggests an improvement of 18.4% from the year-ago quarter’s reported figure, while that for full-year 2025 sales indicates a rally of 25.7%. A similar improvement trend can be observed from its 2026 sales estimates.

Its quarterly as well as yearly earnings estimates also reflect similar robust performance on a year-over-year basis.

Additionally, an upward revision has been observed in the company’s near-term earnings estimates over the past 60 days. This indicates that investors are gaining confidence in the stock’s earnings-generating capabilities.Zacks Investment Research

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Risks to Consider Before Choosing Boeing

While Boeing offers strong growth prospects, it also faces significant challenges that could affect its operational performance, which investors should carefully consider before investing in the stock. Although the commercial aerospace market has been benefiting from steady growth in air travel in recent times, persistent supply-chain issues, particularly those arising from a shortage of aircraft parts, continue to affect the global aviation industry. This, in turn, poses a significant risk for aircraft manufacturers, such as Boeing, Embraer and Airbus.

Looking ahead, persistent supply-chain issues are expected to continue to play the role of a primary growth inhibitor in the commercial aviation industry this year as well. Moreover, the recently imposed tariffs by the U.S. administration on imported goods might exacerbate the global supply-chain turmoil, resulting in delays in acquiring parts needed for Boeing’s jet production. This might increase Boeing’s production costs and strain its production timelines, creating uncertain challenges for the jet giant in maintaining its delivery schedules. This, in turn, might hurt its financial position.

BA Stock’s Poor ROIC

The image below shows that BA stock’s trailing 12-month return on invested capital (ROIC) not only lags the peer group’s average return but also reflects a negative figure. This suggests that the company's investments are not yielding sufficient returns to cover its expenses.Zacks Investment Research

Image Source: Zacks Investment Research

However, the ROIC of its peers, Embraer and Airbus, is currently better than that of Boeing. While ERJ’s ROIC is currently 14.24, that of EADSY is 4.71.

BA Trading at a Premium

In terms of valuation, RTX’s forward 12-month price-to-sales (P/S) is 1.69X, a premium to its peer group’s average of 1.66X. This suggests that investors will be paying a higher price than the company's expected sales growth compared to that of its peer group. The stock’s forward 12-month P/S also seems stretched when compared to its five-year median value, 1.40.Zacks Investment Research

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Should You Invest in BA Stock Now?

To conclude, investors interested in Boeing should wait for a better entry point, considering the stock’s poor ROIC and premium valuation. BA currently has a VGM Score of F, which is also not a very favorable indicator of strong performance.

However, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, considering its recent share price hike, solid sales and earnings growth potential as well as upward revision in near-term earnings estimates.  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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