LUV - Head-to-Head: Boeing vs. Airbus who flies higher?
2023-06-27 09:22:14 ET
The aerospace manufacturing industry is a competitive marketplace that is led by Boeing ( NYSE: BA ) and Airbus ( OTCPK:EADSY ). While the two multinationals have significant operations in other segments like defense, the key fight for air superiority centers around aircraft orders that help bolster their bottom lines.
For a greater analysis, see how these two stocks match up head-to-head:
Airplane Orders:
Purchase orders for new airliners are one of the main revenue generators for both Boeing ( BA ) and Airbus ( OTCPK:EADSY ). With that in mind, the two companies fiercely fight for contract bids by airline companies across the world. One of the largest growing markets that both Airbus ( OTCPK:EADSY ) and Boeing ( BA ) find themselves involved with is India, as the nation becomes the world's most populous country .
Air India recently announced an order for 250 passenger planes from Airbus ( OTCPK:EADSY ) and 220 from Boeing ( BA ) in a deal that was valued at $70B.
India's Akasa Air also recently placed an order for four additional Boeing 737s .
Similarly, India's largest carrier by market share, IndiGo, is reportedly nearing a record deal to buy 500 narrow-body A320-family jets from Airbus .
Elsewhere, Boeing ( BA ) announced that it will invest $100M in infrastructure and programs to train pilots in India.
Performance:
When looking at the head-to-head performance returns of Boeing ( BA ) and Airbus ( OTCPK:EADSY ), the nod goes to latter over the last three months. Airbus ( OTCPK:EADSY ) has also nearly doubled Boeing's ( BA ) YTD return as the stock advanced 15.7% in 2023, compared to the shares of Boeing ( BA ), which are only up 7.8% . However, over a 1-year time horizon, Boeing ( BA ) takes the edge by 10%, whereas Airbus ( OTCPK:EADSY ) takes the lead over the longer 10-year price performance period, with the stock outflying Boeing ( BA ) by essentially 50%.
See a breakdown below of price performance on both Boeing ( BA ) and Airbus ( OTCPK:EADSY ) over multiple time frames:
Wall Street Ratings:
Wall Street has an overwhelmingly positive view on Boeing ( BA ) as analysts have placed a price target on the stock at $235.43. Shares last traded at $205.58, suggesting an upside of 15%. Of the 28 analysts that placed ratings on Boeing, seven of them say the airline manufacturer is a strong buy, another 13 see the stock as a buy, 7 others say it's a hold, while only 1 analyst states BA is a strong sell. See the chart below:
Regarding shares of Airbus ( OTCPK:EADSY ), the Street seems mostly optimistic as there's currently a strong buy rating on the stock with a price target of $48.67. Shares last traded at $34.01, suggesting an upside of 40%. See the chart below:
Seeking Alpha Commentary:
“ Boeing presents a compelling investment opportunity with a robust backlog of $411B and strategic partnerships, poised for outstanding recovery as the global aviation market is expected to fully recover by 2024,” said SA analyst Que Capital.
At the same time, Christoph Liu, another analyst, highlighted: “ Boeing faces significant challenges with its commercial aircraft lineup, debt load, and competition from Airbus.” Liu added: “The company's stock appears overvalued, trading at high multiples compared to earnings estimates and historical P/E ratios.”
Tim Dunn further showcased Airbus when he mentioned: “Data suggests that Delta's flagship Airbus A350-900 has struggled to meet Delta's needs .”
Moreover, analyst Dhierin Bechai said: “In May, Airbus booked 17 gross orders, marking a sequential increase of 12 orders. The orders consisted of one wide body airplanes and 16 single aisle jet with an estimated value of $1B .”
Other Options:
Both Airbus ( OTCPK:EADSY ) and Boeing ( BA ) represent the majority of the pie when it comes to aviation based assembled aircrafts, but investors may also look towards individual airline companies as a subset to the sector to gain additional exposure to the booming travel industry.
Some names include shares of Delta Airlines ( DAL ), Southwest Airlines ( LUV ), American Airlines ( AAL ), United Airlines ( UAL ), and JetBlue Airways ( JBLU ). Furthermore, for a more diversified approach to the airline sector investors also have the option of the U.S. Global Jets ETF ( JETS ).
Year-to-date price action: DAL +31.5% , LUV +4.3% , AAL +27.4% , UAL +43.1% , JBLU +24% , and JETS +18.8% .
More on Boeing & Airbus:
- Airbus, STMicroelectronics pair up for aircraft electrification solutions
- Boeing: Impressive Turnaround
- Airbus said to replace leadership for A320 jetliner program
- Avoid Boeing Stock: It's Fool's Gold
For further details see:
Head-to-Head: Boeing vs. Airbus, who flies higher?