The Boeing Company (NYSE:BA) got a certificate seven years in the making. On August 3, the Federal Aviation Administration approved the 737 Max 7 for commercial service, nearly a decade after Boeing first unveiled the plane and years after the company originally targeted 2019 for certification and delivery. Shares rose 8% that day, closing at $233.49 and putting Boeing within about 9% of its 52-week high of $254.35.
Bull Case: Finished Jets Finally Get A Path To Cash
The Max 7 approval matters for a mechanical reason more than a sentimental one. Plane makers collect the bulk of an aircraft’s price only when they hand it over to the customer, and Boeing has spent years building jets it was not allowed to deliver. About 30 completed Max 7s are sitting in inventory, according to aviation analytics firm Cirium, and Jefferies analyst Sheila Kahyaoglu noted Boeing has roughly 40 Max 7s and Max 10s built and waiting. Certification is what turns that parked inventory into revenue.
That approval also lands on a business already showing real momentum. Boeing delivered 171 commercial airplanes in the second quarter, up 14% from 150 a year earlier, and 314 through the first half, its most since 2018. Revenue climbed 8% year over year to $24.6 billion, free cash flow turned positive at $0.6 billion, and total backlog hit a record $715 billion, supported by cumulative historical orders of more than 7,200 MAX jets. The 737 line is also ramping toward a 47-per-month production rate, helped by a new Everett, Washington assembly line and July’s restoration of Boeing’s own authority to issue airworthiness certificates, a power the FAA stripped after the Max 8 crashes.
Bear Case: The Recovery Still Has To Prove Itself
The certificate came at real cost. The FAA required updated flight-control software, improved cockpit alerts and a redesigned engine anti-ice system before signing off, and it is keeping safety inspectors inside Boeing’s factories to monitor the company’s Safety Management System going forward. That oversight traces directly back to the 2018 and 2019 Max 8 crashes that killed 346 people, plus the 2024 Max 9 door-panel blowout that renewed scrutiny of Boeing’s manufacturing.
The near-term financial payoff is also smaller than Monday’s stock pop implied. Boeing’s own July guidance anticipated the first Max 7 delivery in 2027, and the company still posted a GAAP loss of $0.67 per share in the second quarter. Southwest Airlines, the launch customer, will not likely fly the jet until next year, since its stored planes still need extra-legroom seating installed before handover. Monday’s rally was also driven by cheaper oil and a BNP Paribas upgrade to outperform, not certification alone, and Boeing still needs the larger 737 Max 10 certified, with flight testing already complete but no approval yet.
What The Market Is Pricing In
Hedge fund ownership of Boeing fell from 114 to 99 funds in the most recent quarter, a pullback even as the stock pushed toward its 52-week high. Short interest is negligible at 0.02% of float, showing almost no organized bet against the stock. Boeing’s forward P/E sits at 833.33, as reported by Yahoo Finance on August 5, a figure that reflects how thin Street’s near-term earnings estimates still are rather than a straightforward growth premium. Together, the numbers point to a valuation anchored on recovery expectations, even as institutional participation shows subtle signs of caution.
Where The Story Goes From Here
Boeing now has one of its two long-delayed certifications behind it, with deliveries, revenue and free cash flow all trending in the right direction. The bull case rests on the Max 7 backlog converting into 2027 deliveries and the Max 10 following on schedule this year.
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