The Boeing Company’s BA is best known for its commercial aircraft business, but its Defense, Space & Security ("BDS") segment could become an increasingly important contributor to future growth. As global defense budgets rise and military modernization efforts accelerate, Boeing appears well positioned to benefit from demand for advanced aircraft, autonomous systems, satellites, and defense technologies.
During the first quarter, the BDS unit generated $7.6 billion in revenues, up 21% year over year. While the segment has faced execution challenges in recent years, management continues to focus on improving operational performance and reducing costs across major defense programs.
The BDS unit booked $9 billion in orders, including contracts to continue E-7 Wedgetail development and additional international demand for KC-46 aircraft, which resulted in a solid backlog addition of $86 billion for the period ending March 2026.
During the aforementioned quarter, Boeing's defense business signed a seven-year framework agreement to expand PAC-3 Seeker production and announced a strategic partnership with Rheinmetall to offer the MQ-28 Ghost Bat to Germany. In April, Artemis II successfully completed its mission to the moon, propelled by the Boeing-built Space Launch System core stage rocket.
While commercial aviation remains Boeing's largest business, improving execution, expanding international opportunities, and progress across key defense programs suggest that the BDS segment could become a more meaningful growth driver in the years ahead. If management continues to improve program performance while securing new contracts, the defense business may play an increasingly important role in Boeing's long-term recovery and growth strategy.
Defense Contractors Benefiting From Military Modernization
Rising geopolitical tensions, evolving security threats, and the need to replace aging military equipment are prompting governments across the world to increase defense spending and accelerate military modernization programs. These trends are creating significant growth opportunities for leading aerospace and defense companies. Several companies that are well positioned to benefit from these favorable industry dynamics are discussed below.
Lockheed Martin LMT benefits from strong demand for advanced defense platforms, including the F-35 fighter jet, missile defense systems and space technologies.
RTX Corporation RTX continues to secure defense contracts across missile systems, air defense solutions, and military aerospace programs, supported by rising global security spending.
BA Stock’s Earnings Estimates
The Zacks Consensus Estimate for 2026 and 2027 earnings per share indicates a year-over-year improvement of 98.6% and 2,813.2%, respectively.
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BA Stock Trades at a Discount
In terms of valuation, BA’s forward 12-month price-to-sales (P/S) is 1.74X, a discount to the industry’s average of 2.61X.
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BA Stock’s Price Performance
In the past three months, the company’s shares have risen 10.2% against the industry’s 4.4% decline.
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BA’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The Boeing Company (BA): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).