Boeing takes a step forward in its turnaround. Here's what to watch for next

The key positive is not the headline earnings beat; it is that Boeing is starting to de-risk the shape of the turnaround. When a complex manufacturer moves from surprise charges and delivery slippage toward predictable execution, the equity de-rates less on near-term noise and more on the terminal cash-flow bridge — that is the real multiple expansion mechanism here. The market is still pricing BA like a “prove it” story, but the next rerating catalyst is likely not another quarter of revenue growth; it is a credible glide path to sustained free cash flow, which would force generalist capital back in.

Second-order benefit accrues to the suppliers and to the defense side of the house. If production rates can step up without quality regressions, tier-1 and tier-2 aerospace suppliers should see less erratic inventory digestion and better schedule visibility, while defense programs provide a stabilizer that reduces the earnings volatility premium embedded in the stock. The backlog is also a latent pricing asset: as delivery cadence normalizes, Boeing regains leverage on mix and manufacturing learning curves, which should show up in cash conversion before it fully appears in reported earnings.

The main risk is that the stock is now trading on trust, not proof. The next 60-120 days matter because any FAA pushout on production-rate increases or another certification hiccup would hit both the multiple and the delivery math simultaneously. Meanwhile, China order optimism and Middle East disruption are longer-dated swing factors; neither is necessary for the bull case, so overreliance on those catalysts would be a mistake.

Consensus may be underestimating how much of the near-term upside is already in the shares after the recent rerating. That makes BA a better buy on execution-driven dips than on strength, with the highest-quality entry coming if the market sells the stock on macro/geopolitical noise rather than on company-specific deterioration.