What Does The Market Want From Boeing Stock

For questions about this article or underlying research, email [email protected].

Boeing (BA) stock fell 26.4% from August 7 to November 5, 2026, while the S&P 500 lost 5.0%. The price appears to want a steadier 737 factory, and management said on October 27 that it does not expect steady output at 47 jets a month until 2027. Yet management credited third-quarter sales growth mainly to defense and services, not jetliners. That is the mismatch, though defense helps only if it keeps growing at a real profit. So how fast is Boeing's defense business growing?

Boeing's Defense Sales Grew 15% In The Third Quarter

Defense revenue rose 15% to $7.9 billion in the third quarter of 2026, while Boeing's jetliner sales shrank. Over the same quarter, revenue from its jetliners fell 3% to $10.7 billion. Management attributed that decline to a less favorable mix of deliveries. That makes defense about a third of Boeing's $24.2 billion in quarterly sales.

Management credited the defense rise mainly to higher volume, including classified missile and weapons programs. It said about 2 points of the increase came from Spirit, which contributed about $150 million of the unit's sales in the quarter. Orders are running well ahead of sales. The defense unit booked $23 billion of orders in the quarter, and management put its backlog at a record $101 billion. That backlog does not yet include the US Navy's next fighter jet, which the Navy selected Boeing to design, build and deliver.

Management also expects more defense growth than it did a year ago, forecasting revenue growth in the middle single digits or higher going forward, compared with the low single digits it was thinking of then. That is still slower than the third quarter's 15%, about 2 points of which came from Spirit.

Does Boeing's Defense Business Earn Enough Yet?

Not yet. On management's own measure, the defense unit's operating margin was 6.2% in the third quarter, and that figure includes a $252 million gain on the sale of HRL Laboratories. That gain accounted for about half the unit's operating profit; without it, the margin would have been about 3%. Management said it remains confident of reaching high single-digit margins, so the profit is still catching up with the sales.

That matters because the jetliners are where Boeing loses money. On the same measure, the jetliner unit's operating margin was negative 6.5%. Management also expects 737 deliveries for 2026 to come in shy of its 500 target, because the factory is taking longer to steady.

Defense answers part of that worry: it earns a profit while the jetliners do not, and its sales are growing while theirs shrink. But its margin is thin, and Boeing as a whole still reported a net loss of $116 million in the third quarter.

What Could Go Wrong For Boeing's Defense Business?

You cannot yet see from the record backlog how much profit the new programs will earn. Management said it could not say what type of contract the Navy fighter is under, only that it is an appropriate contract type. The new work also costs cash first. Management listed around $1 billion of higher capital spending, including growth tied to recent defense awards, among the items weighing on free cash flow in 2027.

If defense growth slows, Boeing's growth falls back on its jetliners, where the 737 factory is still steadying. If the defense margin stays thin, defense adds sales without adding much profit.

Defense is still growing faster than the jetliners, but its profit is less settled, since the third-quarter margin included a one-time gain. Boeing is expected to report in January 2027, and the defense unit's operating margin is the number to watch then.

On November 5 alone, the S&P 500 fell 4.4%. Here's how it fared after the 21 days like it.

Still Holding Boeing After The Drop?

Selling a fallen stock can still bring a tax bill if you bought long ago, and holding keeps the risk. A free 30-minute strategy review with our partner advisory firm covers a floor under a large position and a lower-tax unwind.

Map My Exit Options

Spot an error or want more like this? Tell us in 10 seconds.