Boeing (BA) just picked up a multi year U.S. Navy contract to upgrade and extend the life of F/A 18E/F Super Hornets, giving investors clearer defense revenue visibility through 2028 despite softer commercial orders.

The contract news lands after a busy few months, from Moody’s reaffirming Boeing’s credit rating to Citi calling it a turnaround play and investors cheering commentary that the stock has likely bottomed. The backdrop is a 20.67% 1 month share price return and a 20.92% 1 year total shareholder return, which suggests momentum has returned even as civil aircraft orders wobble.

If this defense tailwind has you rethinking the sector, it could be a good moment to explore other potential winners across aerospace and defense stocks and see how they stack up to Boeing.

Still, with the shares up more than 20% in a month yet trading at a roughly 13% discount to the average analyst target and an even wider gap to some bull cases, is Boeing a genuine value opportunity, or is the market already pricing in the turnaround?

Most Popular Narrative: 11.2% Undervalued

With Boeing closing at $216.85 against a narrative fair value near $244, the story hinges on an aggressive recovery in earnings power and margins.

Analysts are assuming Boeing's revenue will grow by 14.9% annually over the next 3 years.

Analysts assume that profit margins will increase from -14.5% today to 6.2% in 3 years time.

Want to see how a loss making aerospace giant is modeled to swing to meaningful profits, with a future earnings multiple that rivals growth leaders rather than legacy manufacturers? Dive into the full narrative to uncover the precise revenue ramp and margin shift that have to fall into place for that valuation to hold.

Result: Fair Value of $244.33 (UNDERVALUED)

However, persistent 737 certification delays and high debt levels could easily derail the earnings recovery embedded in those bullish valuation assumptions.

Build Your Own Boeing Narrative

If you want to stress test these assumptions yourself rather than rely on consensus, you can spin up a custom Boeing storyline in just a few minutes, Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Boeing.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.