- Boeing stock has surged in recent weeks on hopes related to COVID-19 vaccine progress and the recertification of the 737 MAX.
- While air travel demand may return to 2019 levels by 2023 or 2024, demand for new aircraft will remain below the peak seen in 2018-2019 for the foreseeable future.
- The recent peak in new aircraft demand was a bubble (driven by fast-expanding, unprofitable airlines) that has decisively popped.
- Airbus' substantial backlog and product advantage in the narrowbody market will give it a much higher share of annual deliveries going forward than it enjoyed previously.
- Boeing's enterprise value is down just 21% since the beginning of 2019. Considering the deterioration in its prospects over that period, Boeing stock must fall further to reach fair value.
For further details see:
Avoid Boeing Stock Despite COVID-19 Vaccines And 737 MAX Recertification