Airbus’ jetliner family could surpass Boeing in market share by 2024

According to foreign media reports, Barclays stock analysts said recently that Airbus’s near-term future looks “brighter than ever.” This is thanks to a mature portfolio that will provide reliable cash flow over the next 5 years.

“At the heart of the Airbus investment thesis is that we believe the scale and predictability of its free cash flow will be better than Boeing’s, but Airbus’s current share price is higher than Boeing’s,” Barclays analysts said in a new research note. The discount rate is much higher.”

In response, the bank set a price target for Airbus at 155 euros ($171) per share and gave it an “overweight” rating. But on Tuesday morning, Airbus shares traded just above 119 euros a share on France’s CAC-40 index.

  

In contrast, although one of its most popular passenger planes, the 737MAX, has been grounded globally, there is no timetable for a return to service. But Boeing’s stock is currently trading at $372, up nearly 16% so far this year.

Airbus “should overtake” Boeing by 2024, the researchers believe, due to the impact of the global grounding of the 737 MAX and the challenges it faces when its new 777X enters commercial service.

Among them, due to the accident of the 777X in the “final load” test last month, Boeing has said that it has suspended the follow-up test of this new long-haul aircraft, which also leads to the fact that its largest customer, Emirates, may not be able to receive the Boeing 777X in 2020. And experts in the aviation industry say Boeing may not be able to deliver the first 777X until 2021 due to engine problems.

Therefore, Barclays believes that Airbus’ “more mature” product range will ensure that the company has smoother revenue and free cash flow, that is, from 3 billion euros in 2018 to around 9 billion euros in 2024.

“Airbus’ cash flow position has now become more predictable and stable than Boeing’s,” the bank said.

In addition to this, Barclays also conducted a calculation, that is, “If we only count the core commercial aircraft divisions of Airbus and Boeing, the current share price means that the valuation of Airbus is a full 45% lower than that of Boeing.” .

“Such valuation comparisons are biased and do not properly take into account Airbus’ share of the single-aisle jet market,” the bank said. “We estimate the size of the overall narrowbody industry to be $238 billion, implying that Even a five-to-five split would mean a valuation of 140 euros per share for Airbus, or 20% higher than the current share price.”

Barclays also said that “Airbus’ popular A321 jet alone could contribute 3.4 billion euros in free cash flow to the company over the next five years”.

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