Despite signs of recovery, Boeing’s (BA) future still hinges on navigating the legal and regulatory fallout from past safety failures. The FAA has capped 737 MAX production at 38 jets per month, and the company continues to grapple with litigation tied to the fatal crashes that claimed over 300 lives. Even so, Boeing’s improving financials, unmatched technological edge, and a $619 billion backlog make a strong case for a Bullish outlook as these challenges near resolution.
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The stock maintains a dogged uptrend despite taking various knocks in both operations and the legal courts. Despite delivering the most commercial jets in the first half of the year since 2018, BA shareholders still sweat over the verification delay for the 737-7 and -10 variants until 2026. Negative operating margins of 5.1% on its commercial line don’t help its case either. However, it’s not all doom and gloom, with several reasons suggesting that BA stock is currently the equivalent of a coiled spring, having priced in far more negativity than is warranted.
A Familiar Haunting: Boeing’s Legal Purgatory
The fallout from Boeing’s 737 MAX tragedies still casts a long shadow. The crashes of 2018 and 2019 killed over 300 people, leading to a $2.5 billion deferred prosecution agreement (DPA) in 2021. When the DOJ later found Boeing in breach, the risk of criminal charges resurfaced. A plea deal collapsed in 2024, followed by a proposal for a $1.1 billion non-prosecution agreement (NPA) in June this year.
This week, Judge Reed O’Connor questioned the DOJ’s decision to remove independent oversight and listened to victims’ families plead for criminal prosecution instead. Ultimately, the judge will hear challenges from relatives of those killed in the 2018 crash in Indonesia and the 2019 crash in Ethiopia to an agreement that lets Boeing sidestep three years of independent oversight. His pending decision keeps Boeing caught in a state of uncertainty—financially recovering, yet legally adrift.
For investors, this presents an acute wedge of both opportunity and risk. On the one hand, the court’s decision could allow the stock to uncoil all that pent-up negative energy and reach for highs last seen at the end of 2022 at ~$265 per share.
BA Continues Firing on All Cylinders
Meanwhile, Boeing’s most recent financial results suggest that the company is firing on all cylinders despite legal overhangs and production caps. Total Q2 2025 revenue of $22.7 billion represented a 35% YoY increase.
Boeing’s rebound is being powered by its Commercial Airplanes division, which delivered an 81% revenue jump to $10.9 billion. That growth is especially striking given the FAA’s cap on 737 MAX production, lending weight to the bull case: if Boeing can perform this well with the brakes on, what happens when they come off? BA bulls would argue that the stock still has a handbrake effect priced in.
Financially, Boeing is turning a corner. Core EPS losses narrowed to $1.24 from $2.90 last year, though a $445 million NPA charge left a mark. Free cash flow burn shrank to just $200 million—an enormous improvement from $4.3 billion in Q2 2024—with management even projecting positive FCF by year-end.
For a company that ekes out slim margins on each aircraft, stabilizing cash flows despite legal noise and regulatory caps sends a clear signal: Boeing’s core business is regaining its footing, and it has the financial muscle to navigate ongoing legal turbulence.
The Path Forward Includes Both Headwinds and Tailwinds
Boeing’s path forward rests heavily on production. A move to 42 aircraft per month and beyond could unlock substantial revenue and cash flow, positioning free cash flow as the key metric to watch. Meeting its Q4 guidance for positive FCF would confirm that the turnaround is gaining traction.
Yet challenges persist. A criminal trial would expose Boeing to enormous reputational and financial risks. Continued quality failures could also keep the FAA’s 38-per-month cap in place well into 2026. In that scenario, Boeing’s sizable backlog may shift from an asset to a liability, as customers grow weary of waiting for deliveries.
The key takeaway nugget here is that even temporary production caps weigh on Boeing’s financial performance, both in the near and long term.
Is Boeing a Buy, Sell, or Hold?
On Wall Street, BA earns a consensus Strong Buy rating based on 17 Buy, two Hold, and zero Sell ratings in the past three months. BA’s average stock price target of $261.24 implies a ~13% upside potential over the next 12 months.
Last week, Bank of America Securities analyst Ronald Epstein maintained a Buy rating on BA, noting that its 737 deliveries are expected to bounce back to volumes not seen since 2018. Notably, in a separate report, Bank of America maintained its existing price target on BA of $255 per share.
Boeing Remains a Risky but Compelling Growth Play
Boeing remains caught between its past and its potential. The shadow of regulatory and legal troubles has drained billions and lingers over its trajectory. Yet resolution feels closer, and in reality, no competitor can easily replace Boeing’s role in global aviation.
Should production limits ease, the company’s recent performance suggests it could finally start converting its extraordinary backlog into meaningful cash flow. Even at a premium valuation—forward EV/Sales of 57.72, nearly triple sector norms—Boeing offers a growth narrative too significant to overlook.