We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BA Stock Underperforms Industry YTD: What Should You Do Now?
Read MoreHide Full Article
Key Takeaways
BA shares gained 9.9% YTD, underperforming the aerospace-defense industry's 32.5% rise.
Supply-chain bottlenecks, trade tensions, and low ROIC continue to pressure Boeing's growth.
BA's 38% rise in aircraft deliveries and new RDR model highlight its long-term growth potential.
The Boeing Company’s (BA - Free Report) shares have rallied 9.9% in the year-to-date period, underperforming the Zacks Aerospace-Defense industry’s growth of 32.5%. The company faces risks related to the shortage of labor and lingering supply-chain challenges.
Image Source: Zacks Investment Research
Other defense stocks, such as General Dynamics (GD - Free Report) and Northrop Grumman (NOC - Free Report) , have also underperformed the industry during the same period. Shares of GD have risen 31.4% while those of NOC have gained 21.2% during the same timeframe.
Let’s examine the factors that might have led to the stock’s underperformance.
Challenges Faced by BA
While Boeing presents strong growth potential, it also faces several key challenges that investors should weigh carefully. Although global air travel demand continues to recover and expand, the aviation industry remains constrained by persistent supply-chain disruptions, including shortages of engines, castings, and other critical components.
These bottlenecks have delayed aircraft deliveries and increased production costs, limiting manufacturers’ ability to fully capitalize on rising demand. Additionally, geopolitical tensions and logistical challenges across supplier networks could prolong these constraints through the remainder of 2025.
According to International Air Transport Association (“IATA”), the supply-chain constraints will hinder airlines from reaching their full growth potential. As per IATA’s June 2025 outlook, aircraft deliveries are currently about 30% below their previous peak, pushing the global aircraft backlog to a record 17,000 units. Fewer jet deliveries imply lower demand for aircraft made by Boeing, thereby weakening its near-term revenue generation prospects.
Moreover, the persistent trade tensions between China and America continue to pose a threat for Boeing. As of Sept. 30, 2025, Boeing had about five 737-8 aircraft in inventory for Chinese customers, scheduled for delivery by year-end. Any escalation in trade disputes could delay these deliveries, hurt Boeing Commercial Airplanes’ (“BCA”) revenues, and increase inventory costs.
Factors Acting in Favor of BA
Boeing remains one of the largest aircraft manufacturers in the United States in terms of revenues, orders and deliveries, particularly in the commercial aerospace industry. Boeing, being a prominent jet manufacturer, has been witnessing solid delivery and order activities lately. Keeping up with this trend, the company’s BCA segment registered 38% year-over-year growth in its delivery count for the third quarter of 2025, which resulted in a 49% surge in this unit’s revenues.
During the third quarter, the company booked 161 net commercial airplane orders. Such solid order activities should continue to bolster revenue performance for Boeing’s commercial business over the long run.
The Defense Logistics Agency and Boeing assessed a new contract-and-delivery mechanism in November 2025, called Rapid Delivery Release ("RDR"), which reduces the typical proposal-to-award cycle. According to early trial results, RDR parts can be delivered to military customers several months sooner. Boeing is expected to benefit from the RDR model as an operational lever. The company's service offering and revenue mechanics are also expected to improve.
BA Stock’s Estimates
The Zacks Consensus Estimate for 2025 and 2026 earnings per share (EPS) indicates a decrease of 310.48% and 34.86%, respectively, over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for General Dynamics’s 2025 and 2026 EPS indicates an increase of 0.85% and 0.76%, respectively, over the past 60 days. The consensus estimate for Northrop Grumman’s 2025 EPS indicates an increase of 2.44% and that for 2026 implies a decline of 0.10% in the past 60 days.
BA’s Earnings Surprise History
The company beat on earnings in two of the trailing four quarters and missed in two, delivering a negative average surprise of 22.4%.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
BA Stock Trades at a Discount
In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.57X, a discount to the industry’s average of 2.35X. This suggests that investors will be paying a lower price than the company's expected sales growth compared to that of its peer group.
Image Source: Zacks Investment Research
Its industry peers are also trading at a discount compared to the industry’s forward 12-month P/S. While General Dynamics is trading at forward 12-month sales of 1.74, Northrop Grumman is trading at 1.85.
What Should an Investor Do?
Boeing’s growth prospects remain strong amid recovering global air travel demand, but persistent supply-chain disruptions and trade tensions continue to constrain aircraft deliveries and raise production costs. With global jet deliveries about 30% below peak levels and a record backlog, these challenges could weigh on Boeing’s near-term revenues and delay its recovery.
Considering its price underperformance, low ROIC and declining earnings estimates, it is advisable for investors to avoid this Zacks Rank #4 (Sell) stock at present.
Image: Bigstock
BA Stock Underperforms Industry YTD: What Should You Do Now?
Key Takeaways
The Boeing Company’s (BA - Free Report) shares have rallied 9.9% in the year-to-date period, underperforming the Zacks Aerospace-Defense industry’s growth of 32.5%. The company faces risks related to the shortage of labor and lingering supply-chain challenges.
Image Source: Zacks Investment Research
Other defense stocks, such as General Dynamics (GD - Free Report) and Northrop Grumman (NOC - Free Report) , have also underperformed the industry during the same period. Shares of GD have risen 31.4% while those of NOC have gained 21.2% during the same timeframe.
Let’s examine the factors that might have led to the stock’s underperformance.
Challenges Faced by BA
While Boeing presents strong growth potential, it also faces several key challenges that investors should weigh carefully. Although global air travel demand continues to recover and expand, the aviation industry remains constrained by persistent supply-chain disruptions, including shortages of engines, castings, and other critical components.
These bottlenecks have delayed aircraft deliveries and increased production costs, limiting manufacturers’ ability to fully capitalize on rising demand. Additionally, geopolitical tensions and logistical challenges across supplier networks could prolong these constraints through the remainder of 2025.
According to International Air Transport Association (“IATA”), the supply-chain constraints will hinder airlines from reaching their full growth potential. As per IATA’s June 2025 outlook, aircraft deliveries are currently about 30% below their previous peak, pushing the global aircraft backlog to a record 17,000 units. Fewer jet deliveries imply lower demand for aircraft made by Boeing, thereby weakening its near-term revenue generation prospects.
Moreover, the persistent trade tensions between China and America continue to pose a threat for Boeing. As of Sept. 30, 2025, Boeing had about five 737-8 aircraft in inventory for Chinese customers, scheduled for delivery by year-end. Any escalation in trade disputes could delay these deliveries, hurt Boeing Commercial Airplanes’ (“BCA”) revenues, and increase inventory costs.
Factors Acting in Favor of BA
Boeing remains one of the largest aircraft manufacturers in the United States in terms of revenues, orders and deliveries, particularly in the commercial aerospace industry. Boeing, being a prominent jet manufacturer, has been witnessing solid delivery and order activities lately. Keeping up with this trend, the company’s BCA segment registered 38% year-over-year growth in its delivery count for the third quarter of 2025, which resulted in a 49% surge in this unit’s revenues.
During the third quarter, the company booked 161 net commercial airplane orders. Such solid order activities should continue to bolster revenue performance for Boeing’s commercial business over the long run.
The Defense Logistics Agency and Boeing assessed a new contract-and-delivery mechanism in November 2025, called Rapid Delivery Release ("RDR"), which reduces the typical proposal-to-award cycle. According to early trial results, RDR parts can be delivered to military customers several months sooner. Boeing is expected to benefit from the RDR model as an operational lever. The company's service offering and revenue mechanics are also expected to improve.
BA Stock’s Estimates
The Zacks Consensus Estimate for 2025 and 2026 earnings per share (EPS) indicates a decrease of 310.48% and 34.86%, respectively, over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for General Dynamics’s 2025 and 2026 EPS indicates an increase of 0.85% and 0.76%, respectively, over the past 60 days. The consensus estimate for Northrop Grumman’s 2025 EPS indicates an increase of 2.44% and that for 2026 implies a decline of 0.10% in the past 60 days.
BA’s Earnings Surprise History
The company beat on earnings in two of the trailing four quarters and missed in two, delivering a negative average surprise of 22.4%.
Image Source: Zacks Investment Research
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.
Image Source: Zacks Investment Research
BA Stock Trades at a Discount
In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.57X, a discount to the industry’s average of 2.35X. This suggests that investors will be paying a lower price than the company's expected sales growth compared to that of its peer group.
Image Source: Zacks Investment Research
Its industry peers are also trading at a discount compared to the industry’s forward 12-month P/S. While General Dynamics is trading at forward 12-month sales of 1.74, Northrop Grumman is trading at 1.85.
What Should an Investor Do?
Boeing’s growth prospects remain strong amid recovering global air travel demand, but persistent supply-chain disruptions and trade tensions continue to constrain aircraft deliveries and raise production costs. With global jet deliveries about 30% below peak levels and a record backlog, these challenges could weigh on Boeing’s near-term revenues and delay its recovery.
Considering its price underperformance, low ROIC and declining earnings estimates, it is advisable for investors to avoid this Zacks Rank #4 (Sell) stock at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.