Aircraft maker Airbus (EADSY) occupies an interesting position in the aircraft market as, effectively, part of a duopoly with Boeing (BA). And there is a new development that Airbus has seen coming from the Asian market that bears watching. There is a growing interest in long-range aircraft, to the point where some airlines are changing previous orders to the longer-range breed. That left investors considering the matter further, and gave Airbus a fractional boost in Thursday afternoon’s trading.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
The reports note that AirAsia is currently talking to Airbus about converting an order for narrow-body aircraft to an order for A321XLR models instead. AirAsia is a budget airline that is currently in the midst of restructuring, reports note, so a certain amount of change in its property, plant, and equipment priorities makes some sense.
AirAsia is currently working to complete a financial reorganization, but was also in talks to buy another 50 to 70 Airbus aircraft within the next three months. In fact, reports note, AirAsia currently has outstanding orders with Airbus of over 350 planes in total. There was also a potential order for a hefty quantity of A220 planes—a smaller aircraft overall—but those have been pushed aside for now. Given that Airbus has a production backlog of over 8,500 aircraft, it is a safe bet that AirAsia’s planes are nowhere near production just yet. Changing the order accordingly might be within possibility.
The Unexpected COMAC Revival
The Boeing / Airbus duopoly has been somewhat shaky for some time now. There are, after all, other aircraft makers out there. Embraer (ERJ), for instance, is a thing, though nowhere near on either Boeing or Airbus’ scale. But then there is COMAC, the Commercial Aircraft Corporation of China. While this darkest of horses has been in the background for years, it recently made a move that may turn the duopoly into a triumvirate…someday.
Air China (AIRYY), just Tuesday, launched its first international service flight using a COMAC C909 aircraft. The C909 is generally regarded as a regional aircraft, with seating that generally runs between 78 and 90. It is a smaller aircraft, but for regional flights that have shorter turnaround times, such aircraft are not out of line. The flight ran 90 minutes, from Hohhot in northern China to Ulaanbaatar in Mongolia, but still represented a major step forward for COMAC’s ambitions.
Is Airbus Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on EADSY stock based on one Buy assigned in the past three months, as indicated by the graphic below. After a 40.08% rally in its share price over the past year, the average EADSY price target of $38.80 per share implies 25.15% downside risk.
