As 2026 begins, Boeing is navigating with renewed confidence, bolstered by a significant defense contract award and tangible progress in its commercial aircraft division. This dual momentum provides the aerospace giant with a more stable foundation, leading investors to question whether it is sufficient to sustain the stock’s recent recovery.
Operational Turnaround Shows Early Promise
Boeing’s commercial airplane business is showing signs of operational improvement. A key development was the finalization on December 8 of its $4.7 billion acquisition of Spirit AeroSystems. This strategic move brings the production of critical fuselage sections for the 737 MAX and 787 Dreamliner programs back under Boeing’s direct control.
Company leadership views this reintegration as a crucial step toward managing quality issues and supply chain disruptions more effectively. Early indications of progress are visible in delivery figures. A report dated December 10 revealed Boeing delivered 44 aircraft in November, a marked increase over the weaker months seen in the first half of the year.
The November deliveries consisted of:
* 32 aircraft from the 737 MAX series
* 6 Boeing 787 Dreamliners
* 6 freighters or military derivative aircraft
This upward trend suggests production bottlenecks are gradually easing. For the 737 MAX program specifically, Boeing is moving toward its targeted output rate of 42 to 47 monthly deliveries in 2026.
Defense Segment Secures Major Long-Term Backlog
The core of Boeing’s recent positive news is a substantial, sole-source contract from the U.S. Department of Defense for the F-15 program in Israel. The company secured an award valued at $8.58 billion for the F-15 Israel Program.
Key contract details include:
* Production of 25 new F-15IA fighter jets
* Modernization kits for 25 existing F-15I aircraft already in service
* Manufacturing at the St. Louis, Missouri facility, with work extending through December 2035
* A contract structure blending cost-plus and fixed-price incentive elements
* An immediate funding allocation of $840 million upon award
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This order substantially strengthens the backlog in Boeing’s defense business and ensures long-term revenue visibility for its Defense, Space & Security segment.
This award follows another major defense contract confirmed on December 23: a $2.04 billion task order for the B-52 Commercial Engine Replacement Program (CERP). Under this program, Boeing will integrate Rolls-Royce F130 engines into the U.S. Air Force’s B-52 fleet to extend the bomber’s service life into the 2050s. Combined, these recent defense awards total approximately $10.6 billion over the holiday period.
For many market participants, this wave of contracts mitigates the risk that volatility in the commercial airplane segment could disproportionately impact the company’s overall financial performance. The cash flow outlook for the defense division appears particularly brighter as a result.
Stock Performance and Market Perspective
Boeing’s share price has demonstrated a notable recovery throughout the fourth quarter. On a twelve-month view, the stock is up approximately 30%. Closing at $217.25 in the latest session, the equity is trading near its 52-week high and remains well above its moving averages from recent months.
Market analysts perceive the combination of defense awards and operational stabilization in the commercial unit as a form of “downside protection.” The robust order book in the arms segment can cushion fluctuations in commercial aircraft demand, while improved delivery rates support margins in the civil aviation business.
Looking Ahead: Financials and Guidance in the Spotlight
The next significant milestone will be Boeing’s release of its fourth-quarter and full-year 2025 results, scheduled for late January 2026. Investor focus will center on three primary areas:
- 2026 Free Cash Flow: To what extent will the Spirit integration and new defense contracts alter the medium-term cash flow targets?
- Production Rates: Will Boeing confirm the planned increases for the 737 MAX and sustained stability for the 787 production rate?
- Debt Management: At what pace does the company intend to use the additional defense revenues to strengthen its balance sheet?
Entering the new fiscal year with the Spirit acquisition complete and fresh defense contracts exceeding $10 billion, Boeing is better positioned than it has been for several years. The critical test now is whether management can translate this improved foundation into concrete advancements in cash flow generation, profitability, and debt reduction.
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