Boeing (BA)
The OEM ramp trough case: >6,100-aircraft BCA backlog, 737 at 42/month, BCA −17.1% vs BGS ~18.5% margins, ~1.96× book-to-bill, ($1.9B) FY2025 FCF.
Educational analysis for professional use. This profile is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Snapshot
Business Overview
Boeing is the production-recovery half of the commercial airframe duopoly: a backlog worth $567.3B, over 6,100 aircraft at 31 December 2025, that the factory floor is still struggling to turn into cash. FY2025 deliveries totalled 600 aircraft (737: 447; 767: 30; 777: 35; 787: 88). The 737 programme alone carried 4,404 undelivered firm orders, about 9.9 years of backlog at that delivery pace. The market values the shares at $214.51 apiece across 784.7M shares in issue, near $168.3B, as of 9 June 2026.
BCA and BGS economics diverge on one balance sheet. Boeing Commercial Airplanes reported a −17.1% operating margin in FY2025. Boeing Global Services ran ~18.5% excluding a one-time Digital Aviation gain that distorted GAAP to 64.4%. Consolidated revenue split was Products 84% and Services 16%. The OEM vs aftermarket guide uses this BCA/BGS spread as the filed proof that volume ramp and certification cost sit in the airframe segment while margin lives in services.
Spirit AeroSystems reintegration closed in December 2025, pulling key fuselage work back in-house as Boeing tries to stabilise 737 quality and rate. That integration is a balance-sheet and execution story more than a near-term margin release.
How the Numbers Read
FY2025 commercial net orders were 1,173 units against 600 deliveries, a computed book-to-bill of ~1.96× on units (new orders relative to deliveries in the period; Boeing does not disclose a dollar book-to-bill). Total commercial backlog-years derive to ~10.2 years (>6,100 ÷ 600). Both sit inside the 8-12 year range this site treats as a healthy narrowbody backlog. The 737 reached 42/month by end Q4 2025; the 787 is transitioning to 8/month with South Carolina targeting 10/month in 2026. The backlog guide walks through why backlog-years are a derived sensitivity output, not OEM guidance.
Free cash flow was ($1.9B) in FY2025 despite 600 deliveries. Net debt stood at ~$24.7B ($54.1B debt less $29.4B cash and short-term investments). Negative FCF at a 600-delivery ramp trough is what the valuation guide contrasts with aftermarket-heavy names like GE Aerospace printing $7.7B FCF in the same year.
Boeing does not report EBITDA. A filed proxy of operating income $4.3B plus D&A $2.0B gives ~$6.2B, a base for screening OEM-heavy airframers on normalised ramp earnings rather than on a single trough year's FCF.
Valuation Framework
An OEM airframer at a ramp trough is read as a recovery case on rate and margin normalisation, not as a steady FCF compounder. With negative FY2025 FCF, a yield screen tells you nothing at Boeing; the more useful marker is when BCA operating margin crosses from −17.1% toward a normalised ~10% EBIT band (near Airbus Commercial Aircraft EBIT Adjusted 10.4%).
Boeing plus Airbus accounted for 86% of 2024 global deliveries, with a forward outlook of ~80% combined (COMAC ~8%) per IATA/Oliver Wyman. Backlog depth and book-to-bill above 1.0 support demand; whether 737 rate and quality hold drives timing on the recovery case.
What to Watch in the Financials
737 production rate and quality. 42/month achieved by Q4 2025. Any slip back toward lower FAA-capped rates would extend the BCA loss segment and push out FCF breakeven.
BCA operating margin. −17.1% in FY2025. Track quarter-on-quarter improvement as 737 mix scales and one-time charges roll off. BGS ~18.5% ex gain is the aftermarket floor the airframe side needs to approach on a normalised basis.
Book-to-bill on units (~1.96× in FY2025). Well above the >1.0 threshold that marks a growing backlog. Sustained order intake above delivery pace keeps derived backlog-years inside the 8-12 year range.
Free cash flow and net debt. ($1.9B) FCF with ~$24.7B net debt. Working-capital build on ramp and Spirit integration costs are the near-term drains. Positive FCF is the line that marks when cash stops leaking on the ramp.
Key Risks
Production and certification execution. 4,404 undelivered 737 firm orders require sustained rate increases without quality setbacks. Derived backlog-years stretch if deliveries lag orders.
OEM margin trough. BCA −17.1% can persist while rework, supplier disruption and ramp investments absorb cash. Services margin does not offset airframe losses at FY2025 delivery scale.
Leverage at negative FCF. ~$24.7B net debt with ($1.9B) FCF limits balance-sheet flexibility if the ramp slips another year.
Duopoly share erosion. Forward ~80% combined BA+AIR share dominant, but COMAC at ~8% in the outlook adds competitive pressure on single-aisle pricing over the decade.
Commercial Aerospace Sector Primer
Delivery rates and the aftermarket annuity are the inputs. This primer takes them to a dual-rate sum-of-the-parts and an EV/EBITDA you can defend.
The Excel model is the primer's two dual-rate sum-of-the-parts builds live across 12 sheets: original equipment capitalised at a cyclical rate, the installed-base aftermarket at a lower annuity rate, summed to enterprise value. Change the delivery rate, the aftermarket dollars per unit or either discount rate and the value per share moves.