Aerospace giants Boeing (NYSE:BA) and Airbus (OTC:EADSY) could face a new competitor in China – the state-owned Commercial Aircraft Corporation of China (COMAC). COMAC debuted its narrow-body C919 jet at the Singapore Airshow. This was the first time that COMAC brought its C919 outside China. The company also secured orders with Tibet Airlines, ordering 40 C919 aircraft and 10 ARJ21s. In addition, Henan Civil Aviation Development ordered 6 ARJ21s.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
China is a key market for Boeing and Airbus. Boeing has predicted that China will make up 20% of global aircraft deliveries over the next 20 years and expects its domestic aviation market to become the world’s largest. China’s domestic demand is estimated to include 6,470 single-aisle jets like the 737 MAX family by 2042.
Aerospace companies like Boeing and Airbus are struggling to keep up with the sharp rise in demand for aircraft after the COVID-19 pandemic, with supply chain issues further complicating matters. Boeing is facing increasing scrutiny after the Federal Aviation Administration (FAA) halted the production of its 737 MAX aircraft.
On the other hand, Airbus has delayed the service entry of its A321XLR single-aisle jet to the third quarter from the second quarter. This is because supply chain issues are hindering the ramp-up of its production and the airlines’ ability to replace their aircraft with more fuel-efficient jets.
Is Boeing a Buy or Sell?
Analysts remain cautiously optimistic about BA stock with a Moderate Buy consensus rating based on 17 Buys and six Holds. Year-to-date, BA stock has slid by more than 20%, and the average BA price target of $262.67 implies an upside potential of 28.8% at current levels.
