Boeing (BA) Stock Gains 2% on Massive $20B Pentagon Fighter Jet Contract Win

Key Takeaways

• Boeing shares advanced 2% Wednesday following a Pentagon award exceeding $20 billion in value.
• The contract involves developing the Navy’s next-generation F/A-XX Strike Fighter platform.
• Northrop Grumman was passed over in favor of Boeing for this major program.
• This victory comes after Boeing secured the Air Force F-47 fighter contract in 2025.
• Morgan Stanley highlighted Boeing as a potential tactical buy before an important labor decision.

Shares of Boeing (BA) advanced 2% during Wednesday’s trading session. The rally followed news that the Pentagon selected Boeing instead of Northrop Grumman (NOC) for a significant Navy contract.

The Boeing Company, BA

The program focuses on the sixth-generation F/A-XX Strike Fighter platform. Pentagon officials confirmed the complete development phase carries a value exceeding $20 billion.

Boeing now claims its second consecutive major fighter jet contract in less than 24 months. The Air Force selected Boeing for the F-47 program during March 2025.

These dual contracts position Boeing as the primary developer of next-generation fighters for America’s Navy and Air Force. Such dual control by a single defense contractor represents an uncommon achievement.

Industry observers had anticipated Boeing’s selection. BNP Paribas aerospace and defense analyst Matthew Akers noted that market participants viewed Boeing as the likely winner following its F-47 contract success.

How this contract impacts Boeing’s manufacturing operations

The award reinforces Boeing’s defense division during a period when commercial aviation operations face challenges. The contract also provides substantial support for Boeing’s St. Louis facilities.

Boeing continues expanding manufacturing infrastructure at this location. Company officials have indicated the site’s design enables simultaneous support of multiple advanced aircraft programs.

Despite Wednesday’s gains, Boeing stock remains down 13% for the current year. The September period alone saw a 10% decline driven by software complications, 737 MAX 10 certification obstacles, and an approaching labor agreement deadline.

Morgan Stanley addressed these challenges in a Tuesday research note. The investment bank maintained its Equal-weight stance and $250 price objective for Boeing shares.

This target suggests approximately 33% potential upside from the current trading range near $187. The firm characterized the period before the Oct. 1 labor decision as presenting a possible short-term buying window.

Critical labor decision approaching

The Society of Professional Engineering Employees in Aerospace serves as the union representing Boeing’s technical workforce and engineering personnel. Members will complete voting on a revised contract proposal by noon Pacific time on Oct. 1, with outcome announcements expected later that day.

A successful ratification would eliminate a significant near-term uncertainty facing Boeing. A rejection would establish Oct. 7 as the earliest potential strike commencement date, although a failed vote doesn’t automatically trigger work stoppages.

Historical patterns provide relevant perspective. SPEEA has initiated one complete strike against Boeing—a 40-day action during 2000—along with a single-day walkout in 1993.

This contrasts sharply with the IAM machinists union’s history of seven strikes against Boeing spanning 1948 through 2008. Current SPEEA bargaining councils are advising members to approve the proposed agreement.

Meanwhile, Boeing’s 737 MAX 10 program confronts separate obstacles. FAA statements have indicated potential certification timeline extensions related to software problems already impacting MAX 7 aircraft deliveries.

The MAX 10 variant represents approximately 24% to 25% of Boeing’s projected 2027 order backlog based on Cirium analytics. Some exposure could diminish if airline customers convert MAX 10 commitments into MAX 8 or MAX 9 orders.

Boeing’s second-quarter financial results, released July 28, reflected $24.6 billion in revenue supported by 171 commercial aircraft deliveries. The company recorded a GAAP loss totaling $0.67 per share, generating $0.6 billion in quarterly free cash flow.

Boeing’s overall backlog reached an unprecedented $715 billion, encompassing more than 6,200 commercial aircraft orders. The Oct. 1 labor vote outcome should be available that afternoon.