By Al Root

Boeing went from a fairy tale to a tragedy in the blink of an eye. Now the story shifts to redemption -- and it could pay off for the stock.

Once viewed as the perfect cash-flow machine, Boeing has been through seven years of misery, largely of its own doing. Starting with the crash of two 737 MAX jets in 2018 and 2019, the company struggled to make headway with a corporate culture that had put engineering so far down its list of priorities that even the simple task of making sure the door on a plane was installed correctly seemed out of its reach after a blowout in January 2024. Just making planes had become a slog: At the end of last year, Boeing had delivered 265 737-model jets, less than half its annual target and down from 396 delivered in 2023. At Thursday's close, Boeing stock sat 55% below its March 2019 all-time high of $446.01.

Sometimes, though, a leader emerges just when all hope seems to be lost. Kelly Ortberg has been that leader. Since being hired in July 2024 to replace Dave Calhoun, Ortberg, an engineer with decades of experience in the aerospace industry, has done the seemingly impossible: made Boeing stock investible again. He has improved supplier relations, shaken up management ranks, reallocated resources to new program development, and, perhaps most important, is spending more time in Seattle, near where the 737 MAX is produced.

Boeing stock has gained 7% since he was named CEO. Though shares declined after Boeing's third-quarter earnings release on Wednesday, they look set to rise even further as Ortberg demonstrates that the company's resurgence is real.

"I love these stories," says Hightower Advisors Chief Investment Strategist Stephanie Link. "Companies with good bones that have been so poorly run then get a good CEO."

Boeing declined to make Ortberg available for this article.

As much as Boeing's decline seems to start with the first MAX crash, the problems actually started nearly 30 years ago. In 1997, Boeing CEO Philip Condit and McDonnell Douglas head Harry Stonecipher orchestrated the merger of the two companies. While the deal was celebrated on Wall Street, it marked the start of Boeing's shift away from a focus on engineering planes toward financial engineering.

Condit moved the company's headquarters from Seattle to Chicago in 2001, a move designed to de-emphasize the core commercial aerospace business by separating management from production. It was a questionable decision and a culture killer. Things took another hit under Jim McNerney, who took over in 2005 and admitted out loud that "cowering" employees motivated him. After a painful nine-week strike in 2008, Boeing broke ground on its nonunion plant in South Carolina, where it makes the 787 Dreamliner today.

Under McNerney, Boeing's financial path was set. From 2011 to 2019, a period that covered the development of the MAX through its grounding, Boeing spent about $49 billion on research and development and new plants and equipment, amounting to about 6.2% of sales. Airbus spent about $52 billion, or 9.4% of sales, over the same span. Boeing returned some $59 billion to shareholders over that period, including about $40 billion on share repurchases, which decreased shares outstanding from roughly 751 million at the start of 2014 to 568 million at the end of 2018.

It wasn't money well spent: Boeing was forced to sell some $16 billion in common shares at a paltry $143 apiece in October 2024 to help repair its ailing balance sheet. Boeing now has about 760 million shares outstanding, as well as convertible debt sold in October 2024.

Nothing, however, was as damaging as the development of the 737 MAX, which was brought to market by CEO Dennis Muilenburg in 2017. Boeing decided to modify the existing 737 platform to respond quickly to Airbus' A320neo family of jets. It turned out disastrously, with two deadly crashes due to malfunctioning sensors and new flight-control software. The crashes grounded the MAX worldwide for almost two years, tanking Boeing's earnings and cash flow. Dave Calhoun took over for Muilenburg and managed to get the MAX recertified for commercial flight. He announced his departure shortly after an emergency-door plug blew out of a 737 MAX 9 jet while in flight on Jan. 5, 2024.

"At this point, everyone knows the story, right?" says Yale School of Management lecturer Gautam Mukunda. "[Boeing] has been brutally mismanaged for basically my entire adult life."

Enter Ortberg. The first thing investors need to know about him is that he is an engineer. He joined Rockwell Collins in 1987, and became president and CEO in 2013. Collins was eventually acquired by United Technologies -- now RTX -- in 2018. Ortberg left the company in 2021, serving on corporate boards until Boeing came calling.

Ortberg hasn't been afraid to reverse prior management's decisions. He has moved management back to Seattle so it could be near Boeing's workers. He raised cash by issuing stock and convertibles and selling portions of Digital Aviation Solutions to Thoma Bravo for more than $10 billion. He also stopped the development of the X-66 truss-braced-wing demonstrator plane -- a futuristic concept designed to improve efficiency with long, thin wings -- which might one day have produced technologies usable on a commercial jet, but was too far off to help in the next few years.

Gone, too, is the imperial management style that projected confidence when everything seemed to be working, but came across as hubris when the company ran into trouble. "We have seen a far less arrogant tone," says Vertical Research Partners analyst Rob Stallard, who is also a fan of new Chief Financial Officer Jay Malave, who came over from Lockheed Martin. "This improvement has also been noted by customers and suppliers, with a number now commenting that they have much more faith in Boeing actually delivering on its projections."

AeroDynamic Advisory aerospace consultant and managing director Richard Aboulafia called out two additional management changes as evidence of positive momentum: naming Stephen Parker to run Boeing's ailing defense business, and putting former Wisk CEO Brian Yutko, an MIT Ph.D. in aerospace, aeronautical, and astronautical engineering, in charge of commercial aircraft development. Ortberg "isn't afraid of anyone with talent," Aboulafia says.

He also isn't afraid to make nice when he has to. While 3,200 Boeing defense workers are currently striking in St. Louis, where the company makes the F-15 and F-18 fighter jets, its labor strife likely peaked with the seven-week strike that ended in November 2024. Current Boeing management could have offered more up front, says Yale's Mukunda, but a work stoppage might have been unavoidable, given the built-up animosity. Boeing workers won significant pay increases in their new four-year contract and a guarantee that the next narrow-body jet Boeing designs would be built in Washington state.

Boeing still has many problems to solve. The company isn't expected to make a profit in 2025, marking seven consecutive years of losses. It's the worst current streak for a company in the S&P 500 and one of the worst streaks ever, according to S&P Global Market Intelligence, which looked at the current components of the S&P 500. No company in the index has lost more money since 2019 than Boeing.

But there are signs of improvement. Demand, for one, hasn't been a problem for Boeing or Airbus for a while. People like to fly, and the industry has survived shocks including 9/11, SARS, and Covid-19. Today, Boeing has more than 6,600 unfilled orders on the books. The issue has been meeting customers' needs for more planes.

In the six years since the second tragic MAX crash in March 2019, Boeing has delivered about 2,200 jets. In the six years before the tragedy, Boeing delivered twice that many. Deliveries in 2025 should be about 600 jets, according to FactSet, up from fewer than 350 in 2024 but still nowhere near the 806 Boeing delivered in 2018.

The Federal Aviation Administration capped 737 MAX production at 38 a month in the aftermath of the 737 MAX door-plug blowout. It recently raised the cap to 42 a month. Boeing will work toward 46 or 47 a month and, eventually, 50 MAX jets a month. Higher production could help it generate over $11 billion in free cash flow in 2028, Wall Street's current call.

"It's actually a pretty simple story at this point," says BofA Securities analyst Ron Epstein, who has a Buy rating on the stock. "Can it deliver more airplanes? And if they can deliver more airplanes, they generate more cash."

Projecting Boeing's financial performance still isn't easy. Since the second MAX crash, Boeing has missed Wall Street estimates about 70% of the time -- often by a wide margin. That is unheard of. Apple, by comparison, has missed earnings about 10% of the time over that span, while GE Aerospace -- a Boeing peer that has evolved from its own turnaround story into a must-own, industry-leading stock -- missed earnings about 25% of the time.

And Boeing just missed estimates once again. The company lost $7.14 a share during the third quarter, hit by a $4.9 billion charge related to the long-delayed 777x program, much worse than Wall Street's expectation of a $5 per share loss. Third-quarter sales, however, rose to $23.3 billion, up from $17.8 billion in the third quarter of 2024 and the third consecutive quarter of revenue beats. Boeing also delivered 160 commercial jets, up from 116 a year ago, and reported its first quarter of positive free cash flow since 2023.

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October 31, 2025 01:00 ET (05:00 GMT)

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