What happened

Wall Street is finally gaining confidence the 737 MAX will soon fly again. That's providing a lift to Boeing (BA -0.89%) shares, sending the stock up nearly 6% on Monday morning.

So what

Shares of Boeing are down more than 50% year to date, hit by a one-two punch of issues with its 737 MAX and airlines scaling back flying due to the COVID-19 pandemic. The MAX has been grounded since March 2019 following a pair of accidents, and Boeing bled through nearly $10 billion in cash in the first half of 2020 largely due to expenses related to that aircraft.

The first step toward a recovery is getting the MAX airborne again, and it appears U.S. and European regulators will soon recertify the plane for flight.

A Boeing 737 MAX in flight.

Image source: Boeing.

On Monday Alembic Global analyst Pete Skibitski upgraded Boeing shares to overweight ahead of a return to service for the 737 MAX, saying the recertification should help Boeing become free-cash-flow positive in 2021.

Boeing is still looking to cut costs. Bloomberg reported Monday that the company is in the process of thinning its middle-management ranks and shutting down ancillary offices. About 170 mid-level execs, including 70 tied to Boeing's commercial airplane division, are taking buyout offers.

The company, according to the report, is also planning to trim research and development spending, including scaling back an autonomous flight research center planned to open near the Massachusetts Institute of Technology.

More cost-cutting could follow, as Boeing is considering ceasing 787 Dreamliner production in Washington state and consolidating the plane's assembly to South Carolina.

Now what

The 737 MAX return is an important step in Boeing's recovery, but investors should note it is only one of many steps. Once the plane is flying again Boeing will face challenges trying to place the more than 400 airframes built but not yet delivered with customers who are in crisis mode due to the pandemic.

There's a reason Boeing is plotting deeper cuts even as the 737 MAX is poised to return. It's going to take years for Boeing to normalize production rates, which could eat into the overall profitability of the 737 MAX program.

Boeing's stock is down for the year, but there is good reason for that discount. I'd advise investors look elsewhere if they want to buy into a potential commercial aerospace rebound.