Boeing (BA) is back in focus after the Federal Aviation Administration certified the 737 Max 7 for commercial service, clearing a long running regulatory hurdle and allowing the company to begin delivering completed jets.

The 737 Max 7 certification has arrived alongside a sharp pick up in trading interest. Boeing’s 7 day share price return of 8.46% has outpaced its 2.92% year to date share price return and its 1 year total shareholder return of 2.31%, suggesting that momentum has recently improved after a softer 90 day share price return that declined 1.24%.

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The recent jump in Boeing’s share price sits between two readings. Some investors see it as validation of progress on the 737 Max program, while others view it as a short term relief rally that leaves valuation as the next question.

Most Popular Narrative: 46.5% Overvalued

Boeing closed at $234.42, while the most followed narrative on the stock pegs fair value at $160.01 using a 10% discount rate. This creates a sizable gap for investors to weigh.

The operating recovery is real but incomplete. Commercial Airplanes narrowed its operating margin from negative 5.1% to negative 2.7% on 171 deliveries against 150. The 737 is transitioning to 47 per month from 38 a year ago, with a fourth Everett line activated in July, and management targets 52 next year. The FAA certified the MAX 7 today after nearly a decade, with roughly 30 airframes in storage ready for retrofit.

Want to see what has to happen between now and 2031 to justify that $160.01 figure? The narrative leans on rising margins, steady revenue growth and a future earnings multiple that assumes a full operational reset.

Result: Fair Value of $160.01 (OVERVALUED)

However, the narrative can shift quickly if Boeing records another large programme charge or if Commercial Airplanes fails to reach and hold positive margins as expected.

Another View on Boeing’s Value

That $160.01 fair value narrative leans on earnings and multiples in 2031. A contrasting view comes from our DCF model, which estimates the value of Boeing’s future cash flows at $395.28 per share, suggesting the current $234.42 price sits well below that mark. Consider which perspective better fits the risk profile you are comfortable with.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Boeing for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 51 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals around Boeing's valuation and outlook, it helps to move quickly and weigh the full picture for yourself, including 3 key rewards and 2 important warning signs

Looking for more investment ideas beyond Boeing?

If Boeing is on your radar right now, this may be a useful time to widen your watchlist and line up a few fresh ideas before the next move.

• Target potential mispricings by scanning 51 high quality undervalued stocks that combine solid fundamentals with room for the market to reassess expectations.
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• Reduce portfolio shocks by focusing on 79 resilient stocks with low risk scores that may help smooth returns when individual stocks move sharply.

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.