On the surface, it would be terrible news for Boeing (BA) for an airline like Icelandair to openly declare that the Airbus (EADSY) A321neoLR is “the perfect 757 replacement.” However, the news was not that grim, and Boeing shares notched up fractionally in Wednesday’s trading.
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While Icelandair did get in a new Airbus and found it was a solid replacement for its lineup of Boeing 757s, that did not mean that Icelandair was throwing over Boeing in favor of Airbus, noted Icelandair CEO Bogi Nils Bogason in a report from Business Insider. The biggest draw for Icelandair was that the Airbus line is actually 30% more fuel-efficient than the 757s. Given that the 757 was first made in 1982, that really is not out of line.
Further, it was not meant to be a reflection on Boeing, as Icelandair placed the order for the new Airbus in “early 2023.” This was actually before the Alaska Airlines (ALK) incident of January 2023, albeit not by much. And since Boeing never actually built a replacement for the 757, that left Airbus able to come in and offer an alternative that was more fuel efficient but ran at about the same capacity.
Growing Interest and Japanese Contract
A couple of weeks ago, we heard about a contract between Boeing and the Japanese Air Self-Defense Force to handle several “engineering change proposals” for the ASDF’s line of F-15s. That deal ran $129 million to the good for Boeing, but apparently, a new report from AeroTime notes that Boeing now landed another contract from the United States Air Force to offer support for the F-15 Japan Super Interceptor Program. This contract is worth $450.5 million and targets upgrades for the Japanese F-15J fleet.
Finally, a recent report from Sungarden Investment Publishing noted that Boeing could represent a “high reward / controlled risk” opportunity right now, given what has happened to Boeing shares over the last several months. With a new union contract in place, a hefty book of business to work through, and new leadership, there is a lot of potential for Boeing to have a healthy upside, the report noted.
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BA stock based on 14 Buys, six Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 33.38% loss in its share price over the past year, the average BA price target of $191.30 per share implies 15.67% upside potential.
