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Boeing Shares Fall 0.8% Amid DHS 737 Contract and Airbus Competition

Boeing Shares Decline Amid DHS Contract and Intensifying Airbus Competition
Boeing (NYSE: BA) shares closed down 0.8% at $198.72 on December 2025, reflecting a complex interplay of corporate developments, government contracts, and mounting rivalry with Airbus. The stock opened at $200.37 and fluctuated between $201.35 and $198.35 during the trading session, with volume slightly above average at just under 15 million shares. After-hours trading saw shares dip further into the low $198 range, underscoring persistent investor caution.
DHS Contract and Its Implications
Investor focus centered on the U.S. Department of Homeland Security’s recent acquisition of six Boeing 737 aircraft for Immigration and Customs Enforcement deportation flights. Valued at nearly $140 million and executed through Daedalus Aviation, the contract contributes incremental revenue to Boeing but has ignited reputational concerns due to the political sensitivity surrounding deportation operations. Although modest relative to Boeing’s approximately $150 billion market capitalization, the deal signals sustained government demand for the 737 model. Nevertheless, the association with contentious immigration policies has raised environmental, social, and governance (ESG) considerations, which may have dampened investor sentiment and contributed to the day’s share decline.
Competitive Dynamics with Airbus
Boeing’s share performance unfolds against a backdrop of challenges faced by its European rival Airbus. Recently, Airbus issued a software recall affecting 6,000 A320 jets, unsettling investors and prompting a significant drop in its share price. This quality issue compelled Airbus to reduce its full-year delivery target by 4%. In November, Airbus delivered 72 jets, surpassing Boeing’s 44 deliveries—a 17% decrease for the American manufacturer. Despite this, Airbus’s operational setbacks have narrowed the competitive gap.
Notably, Boeing has outpaced Airbus in net aircraft orders for the first time in six years. By the end of November, Boeing had secured approximately 908 net orders compared to Airbus’s 700. Airbus CEO Guillaume Faury acknowledged Boeing’s strong order performance, attributing it partly to trade settlements and diplomatic factors favoring Boeing in long-haul aircraft contracts. Analysts characterize the current market dynamic as “orders win, deliveries lag,” suggesting that Boeing’s momentum in securing orders is bolstering investor confidence in its long-term outlook.
Defense Contracts and Analyst Perspectives
Boeing’s defense segment has provided a degree of resilience amid commercial challenges. The company has secured over $7 billion in new defense contracts, offering support to its stock price despite ongoing difficulties in commercial jet deliveries.
Analyst sentiment remains cautiously optimistic. UBS recently reaffirmed a “Buy” rating on Boeing with a $275 price target, implying a potential upside of 35 to 40 percent from current levels. The firm highlighted Boeing’s robust order backlog—exceeding 1,000 gross orders year-to-date—and emphasized the strategic significance of the Spirit AeroSystems acquisition in stabilizing the supply chain. However, analysts also note that Boeing remains unprofitable and faces risks including high debt levels, regulatory scrutiny, and execution challenges. The positive outlook hinges on Boeing’s ability to deliver on its free cash flow commitments and capitalize on macroeconomic tailwinds, such as the Federal Reserve’s recent interest rate cut, which could reduce capital costs for the heavily leveraged company.
Outlook
Despite recent volatility, Boeing shares remain substantially above late November levels, supported by a strong rally earlier in December following management’s guidance toward positive free cash flow in 2026. Year-to-date, the stock has recorded low double-digit gains, indicating early signs of recovery after several turbulent years. Nonetheless, execution risks and ongoing competition with Airbus will continue to be critical factors for investors in the coming months.

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