Boeing (NYSE:BA) experienced a significant market cap erosion of $9.7 billion over the past week, with shares closing Friday at $222.28, marking a 1.9% decline from the prior week. The aerospace giant's stock initially gained momentum on Monday following the announcement of its fourth 737 MAX assembly line in Everett, Washington, but the positive sentiment faded as the week progressed, resulting in a net loss.
Based on Boeing's outstanding share count of 788.3 million, the company's market value dropped from Monday's high to Friday's close. In contrast, the S&P 500 gained 1.2% for the week, while the Dow Jones Industrial Average slipped 0.5%.
Investor concerns center on Boeing's ability to convert its record $695 billion backlog—which includes over 6,100 jets—into deliveries and cash flow. The company reported negative free cash flow of $1.45 billion in the first quarter, underscoring the urgency of ramping up production. While the new Everett line, described by CEO Kelly Ortberg as a "copy" of the three Renton lines, signals long-term capacity expansion, higher output is not expected until early 2027, when Boeing targets 52 737s per month. Current production is gradually increasing from 42 to 47 units monthly.
In a potential boost for Boeing's order book, PAL Holdings (PSE:PAL), the parent company of Philippine Airlines, is reportedly nearing a deal for 15 Boeing 787-10s, alongside nine Airbus A350-1000s, according to industry sources. Both Boeing and Airbus declined to comment, and PAL stated it had no details to share. Separately, Etihad Airways is close to ordering 10 Boeing 787 jets, though sources caution that talks could still collapse.
While a 25-Dreamliner order from Etihad would represent just 0.4% of Boeing's 6,178-jet backlog as of May, the more immediate focus is on June delivery numbers. Boeing delivered 60 aircraft in May and needs 101 in June to match Airbus's first-half tally of 351 deliveries, or 102 to surpass it. A 101-jet June would represent a 68% surge from May, but this is a benchmark, not a forecast. Deliveries are the primary driver of revenue and cash for planemakers.
The regulatory environment has eased somewhat. The U.S. Commerce Department concluded its investigation into aircraft imports on Thursday without immediately imposing tariffs on planes, engines, or parts. However, the White House retains the option to act within six months if trade negotiations falter, removing near-term cost risks but leaving Boeing's production constraints intact.
Boeing's June orders and deliveries will be closely watched this week, ahead of the Farnborough Airshow later this month. The next major milestone is July 28, when CEO Kelly Ortberg and CFO Jay Malave will discuss second-quarter earnings and the company's outlook. Analysts caution that airline orders could fall through, the Everett line may take longer to ramp up, and supply chain issues could cap 737 output below 47 per month. Bernstein analyst Doug Harned noted in January, "When they get to 47 a month, then they're going to have to get the supply chain to ramp up."
