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NetApp highlighted as Zacks Bull and NVR Bear of the Day
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For Immediate Release
Chicago, IL – October 9, 2026 – Zacks Equity Research shares NetApp (NTAP - Free Report) as the Bull of the Day and NVR (NVR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Boeing Company’s (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Lockheed Martin (LMT - Free Report)
NetApp, a Zacks Rank #1 (Strong Buy), has quietly become one of the cleanest ways to own the data layer of the artificial intelligence buildout. What was long dismissed as a legacy enterprise hardware vendor has reinvented itself as a hybrid-cloud data infrastructure provider, and the market is finally paying up for the transformation.
Shares have more than doubled over the past year and are trading within striking distance of all-time highs. That kind of persistent relative strength, paired with a sharp acceleration in earnings estimate revisions, is precisely the combination we look for in a market leader.
NetApp is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 2% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year.
Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued and are projected to experience above-average earnings growth, signaling a powerful combination that typically leads to higher stock prices over time.
Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our odds of success.
Company Description
NetApp provides enterprise data storage systems and cloud data services worldwide. The company operates through two segments, Hybrid Cloud and Public Cloud. Its ONTAP operating system underpins a family of all-flash arrays, while its first-party storage services are embedded directly inside Amazon Web Services, Microsoft Azure, and Google Cloud — a distribution advantage that no pure hardware competitor can replicate.
What separates NetApp from the rest of the storage field right now is placement rather than product. Artificial intelligence training and inference workloads are extraordinarily data-hungry, and the unstructured data that feeds them has to live somewhere fast, governed, and accessible from both on-premise and cloud environments. That is precisely the problem NetApp has spent three decades solving. Management has now signed roughly 350 AI and data-lake deals, a pipeline that barely existed two years ago.
A Blowout Quarter and Rising Estimates
NetApp reported fiscal first-quarter 2027 results in early September that were strong on every line that matters. Adjusted earnings came in at $2.58 per share against the $2.13 Zacks Consensus Estimate, a 21.1% beat and a 66.5% increase from the year-ago quarter. Revenue of $2.03 billion grew 29.9% year over year and topped the roughly $1.84 billion consensus by about 10%.
The mix underneath those numbers is what makes the quarter credible. All-flash array revenue jumped 46.6% to $1.309 billion, and public cloud revenue rose 28% to $206 million. Together, those two businesses now account for roughly 75% of total revenue, meaning the fastest-growing and highest-margin parts of the portfolio are also the largest.
Management responded by raising full-year fiscal 2027 revenue guidance by $650 million to a range of $7.975–$8.225 billion, which implies roughly 17% growth. The earnings outlook moved up to $9.73–$10.03 per share, a midpoint of $9.88 and growth of approximately 22%.
Analysts have followed management higher. Looking into the current quarter, the Zacks Consensus Estimate now stands at $2.60 per share on $2.11 billion in revenue, reflecting 26.8% earnings growth and 23.8% revenue growth versus the year-ago period. Rising estimates of that magnitude at a company of this size are uncommon, and they are the engine behind the Zacks Rank.
Let's Get Technical
NetApp shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages, and the stock has carved out a clean series of higher highs and higher lows throughout 2026. The September earnings gap came on a surge of volume, which tells us institutions were adding to positions rather than taking profits into strength.
Only stocks in genuinely powerful uptrends make this type of move and sustain it. This is the kind of name we want in our portfolio — one that is trending well and receiving positive earnings estimate revisions at the same time.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As long as that trend remains intact and NetApp continues to deliver earnings beats, the stock should continue its bullish run.
Bottom Line
Backed by a leading industry group, a stellar earnings history, and a meaningful guidance raise, it isn't difficult to see why this company is a compelling investment right now. NetApp carries the highly coveted Zacks Rank #1 (Strong Buy) driven by favorable estimate momentum.
Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven't already done so, be sure to put NTAP on your watchlist.
NVR, Inc. is engaged in the construction and sale of single-family detached homes, townhomes, and condominium buildings in the eastern and southern United States. The company markets its homes under the Ryan Homes, NVHomes, and Heartland Homes brands, and it operates a mortgage banking segment that originates loans for its own buyers.
NVR has long been regarded as the homebuilder's homebuilder. Rather than tying up capital in raw land, the company controls lots through option contracts, which keeps the balance sheet clean, returns on equity high, and downside exposure to land values limited. That model has deservedly earned a premium valuation for the better part of two decades.
But an asset-light land strategy does not insulate a builder from a demand problem, and that is exactly what the industry is facing. Mortgage rates remain high enough to price a meaningful share of move-up buyers out of the market, and the entire sector has responded by buying volume with incentives. NVR is no exception, and its most recent quarter showed what that trade costs.
The Zacks Rundown
NVR has been underperforming the market badly. A Zacks Rank #5 (Strong Sell), the stock has fallen roughly 18% this year. The pattern of lower highs and lower lows has been intact since late last year.
Shares are part of the Zacks Building Products – Home Builders industry group, which currently ranks in the bottom 5% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months, just as it has over the past year:
While individual stocks have the ability to outperform even when included in weak industries, their industry association serves as a headwind for any potential rallies. Stocks in this group are also expected to post below-average earnings growth. With much better alternatives in the current market environment, this stock should be avoided.
Margin Compression Beneath the Order Growth
NVR reported second-quarter results back in July that missed on both lines. Earnings of $83.96 per share came in 11.5% below the $94.82 Zacks Consensus Estimate and fell 22.6% from the $108.54 the company earned a year earlier.
Homebuilding revenue of $2.28 billion declined 11% and missed expectations by 5.2%. Net income dropped 29% to $236.5 million. This was the second consecutive quarter in which the company missed estimates on both the top and bottom lines.
The margin line is where the real damage is. Gross margin compressed to 19.2% from 21.5%, a 230-basis-point decline driven by higher lot costs and $21.7 million in land deposit impairments. Operating margin fell to 14% from 16.3%. Compounding the problem, SG&A held roughly flat near $151 million against revenue that was 11% lower, producing straightforward operating deleverage.
Bulls will point to the order book, and on the surface it looks encouraging: new orders rose 9% to 5,885 units, the cancellation rate improved to 15% from 17%, and backlog grew 9% to 10,998 units valued at $4.99 billion. The problem is the price attached to those orders. Average sales price on new orders fell 5% to $437,100, and settlements declined 8%. NVR is moving units by giving ground on price, which is volume purchased with margin.
Deteriorating Forecasts
Analysts have been marking their numbers down steadily. The third-quarter estimate has been cut by 2.54% in the past 60 days to $106.11 per share. Similar revisions have occurred across every forward period — not just the next quarter — which tells us the Street is rethinking the trajectory of the cycle rather than adjusting for a single soft print.
Consistently missing expectations by a wide margin while forward estimates fall is a recipe for stock price underperformance. These are exactly the trends that the bears like to see.
Technical Outlook
NVR stock has been in a well-defined downtrend since late last year. Both the 50-day (blue line) and 200-day (red line) moving averages are sloping downward, and shares have spent the bulk of 2026 trading beneath them. Rally attempts have been repeatedly capped at progressively lower levels, which is the signature of distribution rather than accumulation.
Shares would need to reclaim both moving averages and show a genuine turn in earnings estimate revisions to warrant taking any long positions in the stock.
Final Thoughts
Every quarter of incentive-driven volume hands back margin that is difficult to win back once buyers are conditioned to expect it. And valuation offers less of a cushion than it appears. A low multiple on a declining earnings stream is not value.
A deteriorating fundamental and technical backdrop, membership in one of the weakest industry groups in our universe, and falling future earnings estimates will likely serve as a ceiling on any potential rallies. Investors should look to alternatives given the market landscape, or perhaps include NVR as part of a short or hedge strategy.
Additional content:
Boeing Shares Down -10.6% in a Month: Sell the Stock Here?
The Boeing Company’s shares have lost 10.6% in the past month compared with the Zacks Aerospace-Defense industry’s decline of 9%. BA continues to carry a significant debt burden despite ongoing efforts to reduce its leverage. While the company’s balance sheet is gradually improving, its high debt levels continue to absorb financial capacity that could otherwise support investments, growth initiatives or shareholder returns.
Shares of other defense stocks, such as Northrop Grumman and Lockheed Martin, have lost 8.7% and 6.8%, respectively. Northrop Grumman is supported by strong backlog levels, higher defense spending and growing demand across strategic deterrence, missile defense, space and advanced aircraft. Similarly, Lockheed Martin benefits from a robust backlog, increasing munitions production and strong alignment with United States and allied defense priorities, providing a foundation for sustained growth.
Considering Boeing’s underperformance, investors may be wondering whether now is a good time to add the stock to their portfolios. Let’s examine the factors and assess the company’s investment prospects to make a more informed decision.
Key Headwinds Facing BA Stock
Boeing’s consolidated debt totaled $45.9 billion as of the end of the second quarter, down $1.3 billion sequentially and $8.2 billion year to date. Cash and marketable securities totaled $20.0 billion, while $10.0 billion of credit facilities remained undrawn. The balance sheet is improving, but debt still absorbs financial capacity that could otherwise support investment or shareholder returns. Boeing expects free cash flow of $1 billion to $3 billion in 2026, with a $700 million DOJ payment scheduled for the third quarter. Management remains committed to debt reduction and preserving its investment-grade rating. Until cash generation becomes more durable, leverage will remain an important constraint on financial flexibility.
The order book is growing, but slow production, delayed deliveries and ongoing inspections could be turning customers away from Boeing’s commercial aeroplanes, leading to recent order cancellations. Aircraft order cancellations during the six months ended June 30, 2026, totaled $2.78 billion and primarily relate to 737 aircraft. Additionally, the 777X program has suffered repeated postponements and significant cost overruns. The Boeing 777X program is running seven years late, with an expected entry-into-service date in 2027. These delays—driven by rigorous FAA scrutiny, design changes and part cracks—have resulted in significant cost overruns.
Factors Acting in Favor of BA Stock
On Oct. 5, 2026, Boeing announced that it received a seven-year contract from Lockheed Martin to scale production and deliver PAC-3 Missile Segment Enhancement (“MSE”) seekers. The award formalizes a previously announced seven-year framework and allows Boeing to triple PAC-3 MSE seeker production. The contract strengthens Boeing's Defense, Space & Security (BDS) business by providing greater visibility into long-term defense demand and supporting higher production volumes for a critical missile-defense component.
On Oct. 1, 2026, Boeing announced that it had received an order for the first four full-rate production MH-139A Grey Wolf helicopters after the U.S. Air Force declared the program had reached initial operational capability earlier in the year. The award moves the Grey Wolf program into full-rate production and supports the Air Force’s plans to deploy the helicopter to protect critical national assets, including strategic missile fields. The new order brings the total number of MH-139A helicopters under contract to 42, with Boeing having already delivered 27.
Estimates for BA Stock
The Zacks Consensus Estimate for Boeing’s 2026 earnings per share (EPS) indicates a year-over-year improvement of 91.45%.
The consensus estimate for Northrop Grumman’s 2026 EPS suggests year-over-year growth of 9.45%. The Zacks Consensus Estimate for Lockheed Martin’s 2026 EPS implies a year-over-year rise of 31.7%.
BA’s Earnings Surprise History
The company beat on earnings in one of the trailing four quarters and missed in the other three, delivering an average negative surprise of 113.46%.
BA Stock’s Poor ROIC
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.
BA Stock Trades at a Discount
In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.36X, a discount to the industry’s average of 2.11X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with that of its peer group.
What Should Be the Next Move?
Boeing is making progress on debt reduction, but elevated leverage and uneven cash generation continue to constrain financial flexibility. Commercial-aircraft production delays, order cancellations and 777X setbacks remain key risks, while growing defense contracts provide a positive offset by strengthening demand and production visibility.
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Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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NetApp highlighted as Zacks Bull and NVR Bear of the Day
For Immediate Release
Chicago, IL – October 9, 2026 – Zacks Equity Research shares NetApp (NTAP - Free Report) as the Bull of the Day and NVR (NVR - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on The Boeing Company’s (BA - Free Report) , Northrop Grumman (NOC - Free Report) and Lockheed Martin (LMT - Free Report)
Here is a synopsis of all five stocks:
Bull of the Day:
NetApp, a Zacks Rank #1 (Strong Buy), has quietly become one of the cleanest ways to own the data layer of the artificial intelligence buildout. What was long dismissed as a legacy enterprise hardware vendor has reinvented itself as a hybrid-cloud data infrastructure provider, and the market is finally paying up for the transformation.
Shares have more than doubled over the past year and are trading within striking distance of all-time highs. That kind of persistent relative strength, paired with a sharp acceleration in earnings estimate revisions, is precisely the combination we look for in a market leader.
NetApp is part of the Zacks Computer – Storage Devices industry group, which currently ranks in the top 2% out of approximately 250 Zacks Ranked Industries. Because it is ranked in the top half of all Zacks Ranked Industries, we expect this group to outperform over the next 3 to 6 months, just as it has over the past year.
Take note of the favorable characteristics for this group below. Stocks in this industry are relatively undervalued and are projected to experience above-average earnings growth, signaling a powerful combination that typically leads to higher stock prices over time.
Historical research studies suggest that approximately half of a stock's price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.
It's no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top 50% of Zacks Ranked Industries, we can dramatically improve our odds of success.
Company Description
NetApp provides enterprise data storage systems and cloud data services worldwide. The company operates through two segments, Hybrid Cloud and Public Cloud. Its ONTAP operating system underpins a family of all-flash arrays, while its first-party storage services are embedded directly inside Amazon Web Services, Microsoft Azure, and Google Cloud — a distribution advantage that no pure hardware competitor can replicate.
What separates NetApp from the rest of the storage field right now is placement rather than product. Artificial intelligence training and inference workloads are extraordinarily data-hungry, and the unstructured data that feeds them has to live somewhere fast, governed, and accessible from both on-premise and cloud environments. That is precisely the problem NetApp has spent three decades solving. Management has now signed roughly 350 AI and data-lake deals, a pipeline that barely existed two years ago.
A Blowout Quarter and Rising Estimates
NetApp reported fiscal first-quarter 2027 results in early September that were strong on every line that matters. Adjusted earnings came in at $2.58 per share against the $2.13 Zacks Consensus Estimate, a 21.1% beat and a 66.5% increase from the year-ago quarter. Revenue of $2.03 billion grew 29.9% year over year and topped the roughly $1.84 billion consensus by about 10%.
The mix underneath those numbers is what makes the quarter credible. All-flash array revenue jumped 46.6% to $1.309 billion, and public cloud revenue rose 28% to $206 million. Together, those two businesses now account for roughly 75% of total revenue, meaning the fastest-growing and highest-margin parts of the portfolio are also the largest.
Management responded by raising full-year fiscal 2027 revenue guidance by $650 million to a range of $7.975–$8.225 billion, which implies roughly 17% growth. The earnings outlook moved up to $9.73–$10.03 per share, a midpoint of $9.88 and growth of approximately 22%.
Analysts have followed management higher. Looking into the current quarter, the Zacks Consensus Estimate now stands at $2.60 per share on $2.11 billion in revenue, reflecting 26.8% earnings growth and 23.8% revenue growth versus the year-ago period. Rising estimates of that magnitude at a company of this size are uncommon, and they are the engine behind the Zacks Rank.
Let's Get Technical
NetApp shares remain above upward-sloping 50-day (blue line) and 200-day (red line) moving averages, and the stock has carved out a clean series of higher highs and higher lows throughout 2026. The September earnings gap came on a surge of volume, which tells us institutions were adding to positions rather than taking profits into strength.
Only stocks in genuinely powerful uptrends make this type of move and sustain it. This is the kind of name we want in our portfolio — one that is trending well and receiving positive earnings estimate revisions at the same time.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As long as that trend remains intact and NetApp continues to deliver earnings beats, the stock should continue its bullish run.
Bottom Line
Backed by a leading industry group, a stellar earnings history, and a meaningful guidance raise, it isn't difficult to see why this company is a compelling investment right now. NetApp carries the highly coveted Zacks Rank #1 (Strong Buy) driven by favorable estimate momentum.
Robust fundamentals combined with a strong technical trend certainly justify adding shares to the mix. If you haven't already done so, be sure to put NTAP on your watchlist.
Bear of the Day:
NVR, Inc. is engaged in the construction and sale of single-family detached homes, townhomes, and condominium buildings in the eastern and southern United States. The company markets its homes under the Ryan Homes, NVHomes, and Heartland Homes brands, and it operates a mortgage banking segment that originates loans for its own buyers.
NVR has long been regarded as the homebuilder's homebuilder. Rather than tying up capital in raw land, the company controls lots through option contracts, which keeps the balance sheet clean, returns on equity high, and downside exposure to land values limited. That model has deservedly earned a premium valuation for the better part of two decades.
But an asset-light land strategy does not insulate a builder from a demand problem, and that is exactly what the industry is facing. Mortgage rates remain high enough to price a meaningful share of move-up buyers out of the market, and the entire sector has responded by buying volume with incentives. NVR is no exception, and its most recent quarter showed what that trade costs.
The Zacks Rundown
NVR has been underperforming the market badly. A Zacks Rank #5 (Strong Sell), the stock has fallen roughly 18% this year. The pattern of lower highs and lower lows has been intact since late last year.
Shares are part of the Zacks Building Products – Home Builders industry group, which currently ranks in the bottom 5% out of approximately 250 industries. Because this industry is ranked in the bottom half of all Zacks Ranked Industries, we expect it to underperform the market over the next 3 to 6 months, just as it has over the past year:
While individual stocks have the ability to outperform even when included in weak industries, their industry association serves as a headwind for any potential rallies. Stocks in this group are also expected to post below-average earnings growth. With much better alternatives in the current market environment, this stock should be avoided.
Margin Compression Beneath the Order Growth
NVR reported second-quarter results back in July that missed on both lines. Earnings of $83.96 per share came in 11.5% below the $94.82 Zacks Consensus Estimate and fell 22.6% from the $108.54 the company earned a year earlier.
Homebuilding revenue of $2.28 billion declined 11% and missed expectations by 5.2%. Net income dropped 29% to $236.5 million. This was the second consecutive quarter in which the company missed estimates on both the top and bottom lines.
The margin line is where the real damage is. Gross margin compressed to 19.2% from 21.5%, a 230-basis-point decline driven by higher lot costs and $21.7 million in land deposit impairments. Operating margin fell to 14% from 16.3%. Compounding the problem, SG&A held roughly flat near $151 million against revenue that was 11% lower, producing straightforward operating deleverage.
Bulls will point to the order book, and on the surface it looks encouraging: new orders rose 9% to 5,885 units, the cancellation rate improved to 15% from 17%, and backlog grew 9% to 10,998 units valued at $4.99 billion. The problem is the price attached to those orders. Average sales price on new orders fell 5% to $437,100, and settlements declined 8%. NVR is moving units by giving ground on price, which is volume purchased with margin.
Deteriorating Forecasts
Analysts have been marking their numbers down steadily. The third-quarter estimate has been cut by 2.54% in the past 60 days to $106.11 per share. Similar revisions have occurred across every forward period — not just the next quarter — which tells us the Street is rethinking the trajectory of the cycle rather than adjusting for a single soft print.
Consistently missing expectations by a wide margin while forward estimates fall is a recipe for stock price underperformance. These are exactly the trends that the bears like to see.
Technical Outlook
NVR stock has been in a well-defined downtrend since late last year. Both the 50-day (blue line) and 200-day (red line) moving averages are sloping downward, and shares have spent the bulk of 2026 trading beneath them. Rally attempts have been repeatedly capped at progressively lower levels, which is the signature of distribution rather than accumulation.
Shares would need to reclaim both moving averages and show a genuine turn in earnings estimate revisions to warrant taking any long positions in the stock.
Final Thoughts
Every quarter of incentive-driven volume hands back margin that is difficult to win back once buyers are conditioned to expect it. And valuation offers less of a cushion than it appears. A low multiple on a declining earnings stream is not value.
A deteriorating fundamental and technical backdrop, membership in one of the weakest industry groups in our universe, and falling future earnings estimates will likely serve as a ceiling on any potential rallies. Investors should look to alternatives given the market landscape, or perhaps include NVR as part of a short or hedge strategy.
Additional content:
Boeing Shares Down -10.6% in a Month: Sell the Stock Here?
The Boeing Company’s shares have lost 10.6% in the past month compared with the Zacks Aerospace-Defense industry’s decline of 9%. BA continues to carry a significant debt burden despite ongoing efforts to reduce its leverage. While the company’s balance sheet is gradually improving, its high debt levels continue to absorb financial capacity that could otherwise support investments, growth initiatives or shareholder returns.
Shares of other defense stocks, such as Northrop Grumman and Lockheed Martin, have lost 8.7% and 6.8%, respectively. Northrop Grumman is supported by strong backlog levels, higher defense spending and growing demand across strategic deterrence, missile defense, space and advanced aircraft. Similarly, Lockheed Martin benefits from a robust backlog, increasing munitions production and strong alignment with United States and allied defense priorities, providing a foundation for sustained growth.
Considering Boeing’s underperformance, investors may be wondering whether now is a good time to add the stock to their portfolios. Let’s examine the factors and assess the company’s investment prospects to make a more informed decision.
Key Headwinds Facing BA Stock
Boeing’s consolidated debt totaled $45.9 billion as of the end of the second quarter, down $1.3 billion sequentially and $8.2 billion year to date. Cash and marketable securities totaled $20.0 billion, while $10.0 billion of credit facilities remained undrawn. The balance sheet is improving, but debt still absorbs financial capacity that could otherwise support investment or shareholder returns. Boeing expects free cash flow of $1 billion to $3 billion in 2026, with a $700 million DOJ payment scheduled for the third quarter. Management remains committed to debt reduction and preserving its investment-grade rating. Until cash generation becomes more durable, leverage will remain an important constraint on financial flexibility.
The order book is growing, but slow production, delayed deliveries and ongoing inspections could be turning customers away from Boeing’s commercial aeroplanes, leading to recent order cancellations. Aircraft order cancellations during the six months ended June 30, 2026, totaled $2.78 billion and primarily relate to 737 aircraft. Additionally, the 777X program has suffered repeated postponements and significant cost overruns. The Boeing 777X program is running seven years late, with an expected entry-into-service date in 2027. These delays—driven by rigorous FAA scrutiny, design changes and part cracks—have resulted in significant cost overruns.
Factors Acting in Favor of BA Stock
On Oct. 5, 2026, Boeing announced that it received a seven-year contract from Lockheed Martin to scale production and deliver PAC-3 Missile Segment Enhancement (“MSE”) seekers. The award formalizes a previously announced seven-year framework and allows Boeing to triple PAC-3 MSE seeker production. The contract strengthens Boeing's Defense, Space & Security (BDS) business by providing greater visibility into long-term defense demand and supporting higher production volumes for a critical missile-defense component.
On Oct. 1, 2026, Boeing announced that it had received an order for the first four full-rate production MH-139A Grey Wolf helicopters after the U.S. Air Force declared the program had reached initial operational capability earlier in the year. The award moves the Grey Wolf program into full-rate production and supports the Air Force’s plans to deploy the helicopter to protect critical national assets, including strategic missile fields. The new order brings the total number of MH-139A helicopters under contract to 42, with Boeing having already delivered 27.
Estimates for BA Stock
The Zacks Consensus Estimate for Boeing’s 2026 earnings per share (EPS) indicates a year-over-year improvement of 91.45%.
The consensus estimate for Northrop Grumman’s 2026 EPS suggests year-over-year growth of 9.45%. The Zacks Consensus Estimate for Lockheed Martin’s 2026 EPS implies a year-over-year rise of 31.7%.
BA’s Earnings Surprise History
The company beat on earnings in one of the trailing four quarters and missed in the other three, delivering an average negative surprise of 113.46%.
BA Stock’s Poor ROIC
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.
BA Stock Trades at a Discount
In terms of valuation, Boeing’s forward 12-month price-to-sales (P/S) is 1.36X, a discount to the industry’s average of 2.11X. This suggests that investors will be paying a lower price than the company's expected sales growth compared with that of its peer group.
What Should Be the Next Move?
Boeing is making progress on debt reduction, but elevated leverage and uneven cash generation continue to constrain financial flexibility. Commercial-aircraft production delays, order cancellations and 777X setbacks remain key risks, while growing defense contracts provide a positive offset by strengthening demand and production visibility.
Considering current execution challenges, price performance and poor ROIC, it is advisable to avoid the stock at present. BA has a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
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