Market News

Germany Approves 1.4B Euro Purchase of Boeing Patrol Aircraft – Report

Germany wants to renew its maritime patrol aircraft fleet. Toward that end, the country’s parliamentary budget committee has approved the purchase of five maritime patrol aircraft from Boeing (BA), according to a Reuters report citing an unnamed parliamentary source.

Germany is interested in the Boeing P-8A model and could spend 1.4 billion euros on the purchase. The Boeing P-8A aircraft can be used for long-distance maritime reconnaissance as well as conducting submarine hunting. (See Boeing stock chart on TipRanks).

If a contract is awarded, Germany will shift from the Lockheed P-3C Orion aircraft fleet to Boeing’s P-8A for its maritime patrol operations.

Jefferies analyst Sheila Kahyaoglu maintained a Buy rating on Boeing stock without assigning it a price target. The analyst reiterated her bullish view after talking with industry executives about the type of aircraft Boeing could bring to market in the near term.

According to Kahyaoglu, “BA should offer a longer range narrowbody, expanding above the mission capability of the 737 MAX, while capturing the lower end range of the 787-8 flight profile.” Boeing’s next model is expected to deliver annual engine efficiency improvements of 2%.

“The next platform could have high composite content, more electric power in the APU, and capability to run 100% SAF,” added Kahyaoglu.

The analyst believes Boeing’s next jet model would have a lifespan of 10 – 15 years instead of 30 years. That would be because the technology in the aircraft coming in the near future would be considered “interim”.

Consensus among analysts is a Moderate Buy based on 8 Buys and 7 Holds. The average Boeing analyst price target of $270 implies 10.85% upside potential to current levels.

According to TipRanks’ Hedge Fund Trading Activity tool, confidence in BA is currently Neutral. The cumulative change in holdings across all 15 funds that were active in the last quarter was an increase of 23,300 shares.

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