Market News

Boeing Expansion Continues with New Orders

Boeing (BA) revealed that Akasa Air, a new Indian carrier and a brand of SNV Aviation, has ordered 72 fuel-efficient 737 MAX airplanes to build its fleet. The deal is valued at about $9 billion at list prices. 

At the 2021 Dubai Airshow, the CEO of Akasa Air, Vinay Dube, said, “We believe that the new 737 MAX airplane will support our aim of running not just a cost-efficient, reliable and affordable airline, but also an environmentally friendly company with the youngest and greenest fleet in the Indian skies.” 

Shares of the aviation, aerospace, and defense technology company declined 3.1% at the close on Tuesday. 

Order Details 

Akasa Air’s order includes two variants from the 737 MAX family, the 737-8 and the high-capacity 737-8-200. With the lowest seat-mile costs for a single-aisle aeroplane and high dispatch reliability, the 737 MAX will provide a competitive edge to Akasa Air in its home market. 

The CEO of Boeing Commercial Airplanes, Stan Deal, said, “We are honored that Akasa Air, an innovative airline focused on customer experience and environmental sustainability, has placed its trust in the 737 family to drive affordable passenger service in one of the world’s fastest-growing aviation regions. The 737 MAX, with its optimized performance, flexibility and capability, is the perfect airplane to establish Akasa Air in the Indian market and ensure it effectively grows its network.” 

As per Boeing’s 2021 Commercial Market Outlook forecast, amid India’s growing economy and expansion of the middle class, strong demand for commercial flights is anticipated. This will fuel the need for more than 2,200 new airplanes in South Asia valued at about $320 billion over the next 20 years. (See Boeing stock charts on TipRanks) 

Other Developments

At the 2021 Dubai Airshow, Boeing disclosed that it bagged an order valued at more than $726 million from the United Republic of Tanzania. The order includes a 787-8 Dreamliner, a 767-300 Freighter and two 737 MAX jets. The planes will be operated by Air Tanzania, the national flag carrier of Tanzania, to expand service from the country to new markets across Africa, Asia and Europe. 

Wall Street’s Take 

Recently, Seaport Global analyst Richard Safran reiterated a Buy rating and a price target of $298 (32% upside potential) on the stock. 

At the current level, Safran believes that it is advisable to consider Boeing as a 2022 turnaround story. 

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 10 Buys and 5 Holds. The average Boeing price target of $268.20 implies 18.78% upside potential. Shares have increased 7.5% over the past year. 

See Insiders’ Hot Stocks on TipRanks >> 

Bloggers Weigh In 

TipRanks data shows that financial blogger opinions are 70% Bullish on BA and in line with the sector average.

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