Normally, when we talk about aerospace stocks, Boeing (BA) is the first thing we think of. But there is a second aircraft maker in this duopoly, and that is Airbus (EADSY). Airbus has been making hay while the sun shines, though shares are down fractionally in Wednesday afternoon’s trading as it brings out a line of smaller jets.
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The A321XLR is a unique model for Airbus: a narrow-body aircraft that has extra long range. Since it is a smaller aircraft, that allows it to burn less fuel and provides greater efficiency than its cohorts in the field. The A321XLR will see service in a trans-Atlantic flight from Spanish airline Iberia, part of a run from Madrid to Boston. Already, orders are starting to pour in for the A321XLR from several other airlines as well.
Airbus has been working to get its new jet certified with the Federal Aviation Administration (FAA) for the last five years, noted a CNBC report, and it burns about 30% less fuel than the older, larger aircraft typically do.
Growing Interest
Boeing has a backlog of orders that is only getting worse thanks to the still-ongoing machinists’ strike, as well as its less-than-stellar reputation earned over the last few months of mechanical failures and occasionally incomprehensible behavior. Thus, it is little wonder that some are looking to Airbus to take up the slack.
Indeed, Riyadh Air recently put in an order for 60 of Airbus’ “A321-family” jets, according to a Reuters report. These may not be the recently-introduced A321XLRs, but they are in the same general class. In fact, with this latest order, the newly-minted airline now has a total of 132 jets in its fleet, including 39 787 Dreamliners from Boeing.
Is Airbus Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on EADSY stock based on one Sell assigned in the past three months, as indicated by the graphic below. After a 14.85% rally in its share price over the past year, the EADSY price target of $29.70 per share implies 21.76% downside risk.
