Boeing selloff overdone despite CEO's production comments, BofA says

Boeing Co (NYSE:BA, XETRA:BCO) is on track to end the week down 6% after CEO Kelly Ortberg flagged continued headwinds on the 737 and 787 production ramps, along with a further delay to 777X certification.

But Bank of America called the market reaction overdone, noting that Boeing's turnaround was never going to follow a straight line.

Earlier this week, Ortberg disclosed that 777X certification testing is now expected to slip into 2027, marking another delay for a program already seven years behind schedule. The CEO attributed the certification delay to a pending approval for a more durable seal on the GE9X engine that powers the 777X, supplied by GE Aerospace.

Boeing maintained that first deliveries remain on track for next year, in line with Bank of America's estimate of zero 777X deliveries in 2026 and 10 in 2027.

The analysts pointed to noticeable improvement compared with a year ago and said the bigger near-term risk is a potential SPEEA strike, with the union's current contract set to expire October 6.

On the 737 program, Ortberg's comments that the production ramp has yet to stabilize at 47 aircraft per month were seen as the most market-moving remark. Bank of America said the bottleneck remains in-house wing production, though the broader supply chain is holding up and Boeing has plans in place to address it. The analysts noted this kind of growing pain is typical when scaling production of a large, complex aircraft.

On a more positive note, Boeing expects certification of the 737 MAX 10 variant "very soon." That variant makes up 30% of Boeing's 737 backlog and is viewed as a key free cash flow driver. Bank of America's 2026 forecast of 519 737 deliveries remains unchanged.

Bank of America said Ortberg's comments add some risk to its 2026 free cash flow estimate of $2.4 billion but said it remains comfortable with that forecast for now.