Boeing (BA 0.69%) has faced a multitude of tribulations over the past decade. But the company recently got a reprieve from a trial that would've been its biggest yet.
On June 2, U.S. District Judge Reed O'Connor removed Boeing's upcoming criminal trial from the docket, as the court considers a motion to dismiss a fraud case against the jet maker that stemmed from two deadly crashes (in 2018 and 2019) of 737 MAX aircraft. Investors are still awaiting the court's final decision, but things seem to be moving in a good direction. A crash of a Boeing Dreamliner last week in India knocked the stock down a bit, but it's up 14% so far this year.
Boeing had been set to stand trial, starting on June 23, for allegedly misleading federal regulators about a stability-control system in the 737 MAX that played a role in the crashes of Lion Air Flight 610 in 2018 and Ethiopian Airlines Flight 302 in 2019. In total, 346 passengers died in the plane crashes.
But in late May, the Department of Justice and Boeing came to terms on a non-prosecution agreement, and the DOJ promptly asked the presiding court to drop the case.
Image source: Getty Images.
This is a big deal for Boeing
As O'Connor weighs the 11th-hour motion to dismiss the case -- and considers the objections of the crash victims' families -- the stakes couldn't be higher for Boeing.
If the court drops the case, Boeing avoids a potential felony conviction. It also dodges an ugly, high-profile criminal trial that would've kept Boeing in the news for all the wrong reasons.
From a 30,000-foot view, it would lift a legal cloud that's been looming over the company since the 737 MAX tragedies, which could help clear the runway for Boeing to rebuild its reputation and restore investor confidence.
Boeing isn't out of the woods yet
Under federal law, O'Connor must consider the arguments of the crash victims' families, who have said they will fight the DOJ's motion to dismiss the case against Boeing. Their objections are due by June 18, after which the DOJ and Boeing will have a week to respond.
It's worth noting that in December 2024, O'Connor rejected a proposed plea deal that would've established an "independent compliance monitor" to oversee Boeing's reform efforts, in addition to levying millions of dollars in financial penalties.
In his ruling, O'Connor expressed concern that the agreement would "marginalize" the court by giving the government sole discretion over selecting and overseeing the compliance monitor. The judge also took issue with DEI (diversity, equity, and inclusion) language in the selection requirements. O'Connor noted that "numerous" victims' families voiced similar objections.
The non-prosecution agreement that's on the table now doesn't include any DEI language. However, under the agreement, Boeing would get to pick an "independent compliance consultant" -- subject to DOJ approval -- excluding the court from oversight. That could raise a major red flag for O'Connor, given his previous ruling.
What's next for Boeing stock?
Boeing stock has rallied 14% in 2025, with the stock sliding after last week's deadly crash of a Boeing 787 Dreamliner in India. Outside of that crash, investors have been buoyed by a string of contract wins and positive headlines this year:
- In March, the U.S. Air Force tapped Boeing to build its next-generation fighter aircraft, the F-47.
- On April 23, Boeing delivered a first-quarter earnings beat and reported a narrower-than-expected Q1 loss.
- In the Q1 earnings call, executives said Boeing is ramping up production of the 737 MAX and is on target to reach its goal of 38 jets per month this year.
- In May, Boeing and Qatar Airways announced that the airline will buy up to 210 Boeing widebody jets in a deal that the White House valued at $96 billion.
Analysts expect the momentum to accelerate.
Consensus estimates call for Boeing to grow earnings by 91% this year and a staggering 332% next year, making it back into positive territory. Wall Street seems to be buying into CEO Kelly Ortberg's assertion that Boeing is "moving in the right direction."
If O'Connor grants the DOJ's request to toss the criminal trial, it will lift a legal weight that's been dragging on the stock since the 737 MAX crisis began. That kind of clarity could help fuel the next leg of Boeing's recovery -- and potentially send the stock even higher.
