Leading European aerospace company Airbus (OTC:EADSF) signed a new cooperation agreement with China’s Aviation industry partners. Under the agreement, the commercial aircraft, helicopters, defense, and space product manufacturer plans to double its production in China, enabling it to capture increased market share in the world’s leading aviation market.
At present, Airbus has one A320 production facility in Tianjin, China. The company plans to add a second assembly line for A320s at its existing plant in Tianjin. The new assembly line will increase the company’s production to 75 aircraft per month in 2026.
The company highlighted that China’s air traffic would grow at an average annualized rate of 5.3% over the next 20 years, which is higher than the global average of 3.6%. This will drive demand for passenger and freighter aircraft, supporting Airbus’ growth.
Is Airbus a Good Stock to Buy Now?
Airbus’ top line increased 13% year-over-year in Fiscal 2022, reflecting a recovery in air traffic and an increase in airline companies’ attention to long-term fleet planning. Moreover, its earnings also showed a slight improvement.
However, the near-term pressure on its revenue and margins from inflation and other macro headwinds keeps analysts sidelined.
Airbus stock has received six Buy, three Hold, and three Sell recommendations for a Hold consensus rating. Moreover, analysts’ average price target of $150.97 implies an upside potential of 9.54%.
