Investing in Airbus by Boeing is the reason | Finance

Đầu tư vào Airbus bởi Boeing chính là lý do- Ảnh 1.

RBC analyst Ken Herbert upgraded Airbus shares to Buy from Hold. His price target was raised to 192 EUR (~$208) from 145 EUR (~$157).

Airbus shares rose 2% in overseas trading to 166.50 euros a share, bringing the stock price up 19% this year and about 43% over the past 12 months.

“We believe the recent positive sentiment shift still has room to grow, as the narrowbody market share gains could be sustained further and investor confidence for 2024-2026 targets improves,” Herbert said.

Narrow-body aircraft are single-aisle jets like the A320 and 737 MAX. The positive sentiment shift is from Boeing to Airbus as Boeing struggles with more problems with its MAX planes.

The emergency opening of a MAX plane's door mid-air on January 5 prompted the Federal Aviation Administration (FAA) to limit Boeing's MAX production to 38 a month, but Airbus can produce nearly 50 A320 jets a month.

Airbus plans to ramp up production to about 75 planes a month over the next few years. Boeing had wanted to ramp up production to 50 MAX planes a month, but increased FAA oversight will delay that increase.

Đầu tư vào Airbus bởi Boeing chính là lý do- Ảnh 2.

Herbert believes that the market share shift between Boeing and Airbus is slow, and the current trend in favor of Airbus is unlikely to stop in the near future. That is what makes him confident that Airbus can meet its mid-decade targets.

“Contemporaneity is a strong competitive advantage in the aviation market,” Herbert wrote. “We believe Airbus will capture around 55% of total narrowbody deliveries in 2024–2026.”

Herbert also forecasts Airbus' free cash flow in 2025 to be around €6.2 billion (~$6.69 billion), in line with Wall Street forecasts, and up from the €4.3 billion (~$4.64 billion) expected for 2024.

Herbert's target price for the stock is €192 (~$207.33), which is 24 times his 2025 free cash flow estimate per share. His target price for Boeing is $260, which is about 20 times his 2025 free cash flow estimate per share.

Herbert also has a Buy rating on Boeing, a popular view on Wall Street: 69% of analysts rate Boeing stock “Buy.” The average Buy rating for stocks in the S&P 500 is about 55%. The average analyst price target for Boeing is about $261, while the stock is just $180.09.

Overall, 83% of analysts rate Airbus shares “Buy,” with the average analyst price target at €169 (~$184) per share.

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