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Boeing to Make Commercial Aircraft Fly on 100% Sustainable Fuel by 2030
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Boeing to Make Commercial Aircraft Fly on 100% Sustainable Fuel by 2030

Boeing (BA) has recently announced that it is focusing on preparing its commercial aeroplanes fly fully on sustainable aviation fuel by 2030, as a commitment to the environment. The outlook looks ambitious yet feasible as Boeing has earlier successfully conducted test flights with 100% sustainable fuel, replacing petroleum jet fuel.  

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Several scientific studies, including one conducted by the Air Transport Action Group, the U.S. Department of Energy, have found that sustainable aviation fuels cut carbon dioxide emissions by up to 80% across the fuel’s life cycle.

Notably, Boeing has partnered with various airlines, governments, research institutions and industries to pioneer the commercialization of sustainable aviation fuels by expanding supplies and reducing cost. (See Boeing stock chart on TipRanks)

The President and CEO of Boeing Commercial Airplanes, Stan Deal, said, “Our industry and customers are committed to addressing climate change, and sustainable aviation fuels are the safest and most measurable solution to reduce aviation carbon emissions in the coming decades.”

Recently, Morgan Stanley analyst Kristine Liwag reiterated a Buy rating on the stock with a price target of $274, implying 21.3% upside potential to current levels.

Liwag believes that the recent Airworthiness Directive issued by the FAA to inspect few Boeing 737 aircraft is not likely to affect the positive outlook for the Boeing 737 MAX aircraft. She notes that these inspections are common.

The analyst further notes that the airlines that had canceled Boeing’s narrowbody aircraft orders during the pandemic now want them back, highlighting the strong demand for the narrowbody. Moreover, Chinese airlines are showing a growing interest in the 737 MAX. This can lead to recertification of the 737 MAX in China in the third quarter itself, and in turn, drive growth in production.

Consensus among analysts is a Moderate Buy based on 9 Buys and 8 Holds. The average Boeing price target of $272.76 implies 20.8% upside potential to current levels.

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