Boeing (NYSE: BA), the aviation, aerospace, and defense technology company, revealed that Arajet, a new Caribbean airline, has ordered 20 fuel-efficient 737 MAX airplanes. The financial terms of the deal have been kept under wraps.
Boeing’s commercial wing VP of sales in Latin America & Caribbean, Mike Wilson, commented, “Flying an exclusive 737 MAX fleet will enable Arajet to save on fuel, maintenance and operations costs, and pass those savings on to its customers.”
Order Details
To enhance operational efficiency and provide more cost-effective travel options in the Americas, Arajet has kept the option open to buy 15 additional 737 MAX jets. This added option, combined with existing lease agreements, would increase the airline’s fleet to 40 airplanes.
Encouragingly, Arajet CEO Victor Pacheco Mendez said, “The entire team was elated to see our first aircraft arrive in Santo Domingo a few days ago, and we are eager to expand our fleet with more of these amazing jets in the months ahead.” Arajet already has a 737-8, which was leased from Griffin Global Asset Management. The aircraft was delivered in early March.
The 737 MAX family’s superior efficiency, flexibility, and reliability, along with the reduction of fuel use by a minimum of 20% compared to airplanes replaced by it, make it a promising product. Additionally, the freshly minted fleet will maintain far lower levels of noise, not to mention a meaningful reduction in air pollution.
The company has lofty goals for expansion. By way of this new order for aircraft, Arajet expects to add services in the continental United States, Brazil, Colombia, and beyond.
Wall Street’s Take
Yesterday, J.P. Morgan analyst Seth Seifman reiterated a Buy rating and a price target of $270 on the stock. This indicates a 53.83% upside potential from Monday’s closing price of $175.52 per share.
The rest of the Street is cautiously optimistic about the stock, which has a Moderate Buy consensus rating based on 13 Buys and five Holds. The average Boeing price target of $256.18 implies 45.95% upside potential. Shares have dropped 33.92% over the past year.
News Sentiment
News Sentiment for Boeing is currently Positive based on 95 articles over the past seven days. 86% of the articles on BA have a bullish sentiment, compared to a sector average of 63%. This is while 14% are bearish, compared to a sector average of 37%.
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