That's two in a row for Boeing.
Tuesday, the Navy awarded Boeing a multi-billion-dollar contract to make its F/A-XX sixth-generation fighter jet.
Boeing stock rose 2.4% in after-hours trading to $192.17. Shares gained 1.8% in regular trading, recovering some of Monday's loss following the discovery of a software glitch impacting 737 MAX jets.
"It's an honor to be selected to produce the Navy's first sixth-generation platform," said Steve Parker, president and chief executive officer, Boeing Defense, Space & Security, in a news release. "Backed by decades of work...our dedicated and talented team is ready to execute this critical program."
Boeing was up against Northrop Grumman in the Navy competition. Investors expected Northrop to win. Its shares fell 4.8% in after-hours trading.
One reason for that expectation was Boeing's win over Lockheed Martin in the competition to supply the Air Force with a sixth-generation fighter jet. Boeing won that race in 2025. Investors believed that the U.S. military might prefer to have more than one supplier with a viable sixth-generation fighter jet program. That turned out not to be the case.
Generations refer to the technology and capabilities of certain planes; the F-35 and F-22 are fifth-generation fighters. Russia and China have fifth-generation fighters, and China has shown what appears to be a prototype of a sixth-generation jet.
More advanced jets have better weapons, software, maneuverability, and improved stealth technology. They are also expensive. The F-35 can cost more than $100 million to purchase, and another $500 million to $700 million to maintain and operate over its multidecade service life.
For the Navy, a new jet will extend the fighting range of its carrier-launched fleet. The F/A-XX will likely replace the F-18 Super Hornet, which is built by Boeing.
After Boeing's win over Lockheed in 2025, Jefferies analyst Sheila Kahyaoglu wrote that it was worth about $200 million in annual earnings. Using that as a guide and adjusting for the number of Hornets, the Navy contract might work out to $500 million in annual earnings. That works out to about 60 cents a share for Boeing.
At a market valuation multiple, that's worth about $11 or $12 a share. Investors need to use market multiples because Boeing's earnings have been depressed for years by 737 MAX issues. Shares currently trade for about 70 times earnings expected over the coming 12 months.