Boeing aims to certify 737 MAX variants by year-end, CEO tells Aviation Week

Boeing CEO Kelly Ortberg anticipates completing the certification of the 737 MAX family, including the MAX 7 and MAX 10 variants, by the end of the year, potentially unlocking deliveries of these aircraft crucial to Boeing's backlog, which includes nearly 1,200 MAX 10 orders and 332 MAX 7 orders; however, customer expectations for MAX 10 deliveries are pushed out to 2027 at the earliest. Ortberg also noted progress in certifying the 777-9, with deliveries expected to begin next year, despite the program facing delays since its initial 2020 target.

Analysis

Boeing's CEO, Kelly Ortberg, anticipates completing certification for the 737 MAX 7 and MAX 10 variants by the end of the current year, a development crucial for initiating deliveries against a significant backlog comprising nearly 1,200 MAX 10 and 332 MAX 7 orders. These certifications have been notably delayed, partly due to concerns surrounding the engine de-icing system. However, this optimistic timeline from Boeing contrasts with more conservative delivery expectations from key customers; United Airlines does not foresee MAX 10 deliveries until 2027 at the earliest, while Alaska Airlines anticipates them no sooner than mid-2026, indicating a potential misalignment or further challenges ahead. Separately, Boeing reports progress in certifying the 777-9, its largest jetliner, with deliveries now projected for the next year, a substantial delay from the initial 2020 target, impacting 419 orders. The overall sentiment surrounding these updates is mixed, reflected by a sentiment score of -0.15 and specific negative sentiment for Boeing (BA) at -0.3, and external AI-driven analysis from InvestingPro suggests BA may not currently be a leading undervalued stock despite these ongoing efforts to clear its certification hurdles.

Key Decisions for Investors

• Investors should closely monitor Boeing's progress towards its stated year-end certification timeline for the 737 MAX 7 and MAX 10, as achievement is key to unlocking substantial backlog revenue, but remain cognizant of the significant discrepancies with airline delivery forecasts which suggest potential for further delays.
• The certification and delivery timeline for the 777-9, now expected next year after significant past delays, warrants careful observation, as any further slippage could impact future earnings and investor sentiment.
• Given the mixed sentiment, Boeing's specific negative ticker sentiment, and external AI analysis indicating BA is not a top undervalued pick, investors should exercise caution and weigh the potential benefits of eventual program resolutions against ongoing execution risks and the divergence between company targets and customer expectations.