While aircraft maker Airbus (EADSY) enjoys a certain status as one of two firms in the large jet making class—alongside perennial competitor and fellow duopoly participant Boeing (BA)—there were some concerns about Airbus’ ability to make sales. This is particularly true given the overall market. But Airbus recently revised its 20-year sales forecast, and thinks it can coax some more sales out of the market. That was good enough for investors, who sent shares ticking up fractionally in Thursday afternoon’s trading.
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Airbus’ new forecast for airplane demand over the next 20 years is now up, and Airbus expects a total of 43,420 commercial jets to be delivered between now and 2044. That represents an increase of 2% against previous forecasts, and the total is shared out over the entire industry, which is mostly itself and Boeing for now. Airbus also looks for air traffic to grow around 3.6% annually, a prediction that it had made previously and is currently sticking to.
Airbus’ vice president for market analysis and forecast, Antonio Da Costa, noted that there was some “turbulence” in the market, “…thanks to the recent geopolitical and trade situation.” But Da Costa also noted that “…the early signals are giving us some level of hope.” Given that the projection period goes over 20 years, just about anything could happen in that time frame and still be reasonable.
Preparing for the Future
Meanwhile, Airbus is out to get its portion of that future growth with a new aircraft. It is now starting up the early stages of getting the A220 certified, a new 160-seat aircraft. The A220, reports note, is actually a product of a “strong request from the market,” which wanted a version of Airbus’ craft that had a higher number of seats available.
The A220-300 currently has a maximum seating of 149, reports note, though that depends on the craft meeting what is known as “over-performing Type III criteria.” This focuses mainly on the plane’s overwing exit, and requires such things as a “dual-lane evacuation slide.” Several “engine-removal drivers” have also been addressed, the report noted, which should improve time-on-wing for the current line of engines.
Is Airbus Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on EADSY stock based on one Buy and one Hold assigned in the past three months, as indicated by the graphic below. After a 19.45% rally in its share price over the past year, the EADSY price target of $38.80 per share implies 17.59% downside risk upside potential.
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