Southwest considers 787 order, but Boeing's core catalysts remain unchanged

What happened

Reuters reported on Oct 8, 2026 that Southwest Airlines is leaning toward ordering Boeing's 787 Dreamliner for a planned long-haul international expansion, citing three sources familiar with fleet planning. This potential order would mark Southwest's first widebody aircraft, a significant fleet shift, but it is still under consideration and not a firm commitment. Boeing's current investment case, as detailed in the DeepValue report, remains centered on FAA production and certification milestones for the 737 and 787 programs, which have not changed with this news. The company already holds a massive $715 billion backlog, including strong 787 demand, so incremental order news is less impactful than actual delivery execution. Thus, while the news is a positive demand signal that could support the 787 production ramp from 8 to 10 per month, it does not alter the near-term financial outlook or the WAIT rating.

Implication

The potential Southwest order underscores that airlines are looking to widebody expansion, which supports Boeing's 787 demand narrative and could help justify the planned production rate increase to 10 per month. However, until an order is actually placed and deliveries scheduled years out, it contributes little to near-term cash flow or earnings, which are still heavily dependent on 737 and 787 delivery volumes and regulatory approvals. Boeing's valuation at 30x EV/EBITDA and 87x P/E leaves little room for error, and the key upside catalysts remain the FAA certification of the 737 North Line and MAX 7/10, as well as sustained 737 production at 47 per month. Investors should not overweight this news; the more important events in the next 6-12 months are regulatory decisions and Boeing's ability to convert its backlog into delivered aircraft and reduced debt. The WAIT rating remains appropriate; an attractive entry near $210 or a clearer path to certification would be needed to upgrade the thesis.

Thesis delta

The thesis is unchanged: Boeing's value hinges on FAA-controlled production and certification milestones, not on order announcements. The Southwest news adds a potential future widebody customer, which is a mild positive for 787 demand but does not address the near-term execution risks. No rating or price target change is warranted at this time.