European aerospace company Airbus SE (FR:AIR) is set to fly higher on a potential major order from American air carrier Delta Air Lines (NYSE:DAL). Reports suggest that Airbus could win an order for several wide-body jets, including additional A350-1000 aircraft from Delta. The deal is expected to be announced when Delta reports its fourth-quarter results on January 12.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Airbus SE designs, manufactures, and provides aerospace products, space, and related services. It is one of the largest commercial aircraft manufacturers in the world. AIR shares have gained 23.6% in the past year.
More About Delta’s Airbus Order
Airbus has been Delta’s preferred airplane manufacturer for years. At the end of September 30, 2023, Delta had 65 Airbus A330 and 28 A350-900 wide-body jets. Plus, it committed to buy another 16 jets of both models. Airlines across the globe are striving to purchase more jets and increase or renew their fleet as worries about a shortage in supply in coming years are doing the rounds. Notably, Airbus has won the industry record for securing the highest gross and net orders in 2023.
Airbus’ twin-aisle jets are a desirable choice for airline flights to Asia-Pacific. After the post-pandemic boom in air travel demand, the Asia Pacific region has been the slowest to pick up momentum. The region is seemingly a high-margin revenue source for American air carriers as they struggle with rising fuel costs and inflation. Specifically, American air carriers are expected to increase their capacity on flights to the region by over 70% compared to the past year.
Airbus is set to become an even bigger player in the aerospace market, considering that rival American aircraft maker Boeing (NYSE:BA) is facing a slew of challenges. Recently, loose bolts discovered on some 737 MAX 9 Boeing jets and an incident of a piece of the plane getting dislodged mid-flight have severely impacted Boeing’s credibility. Boeing is already undergoing inspection for several quality issues and the new complaints are only adding fuel to the fire. This surely seems like the best time for Airbus to leverage the situation and capture a larger share of the pie.
Is Airbus a Good Stock to Buy Right Now?
Considering the above points, it does feel like good times are here to stay for Airbus. Yesterday, Barclays analyst David E. Strauss reiterated a Buy rating on AIR stock with a price target of €152 (6.2% upside potential).
Even so, analysts remain split on Airbus’ stock trajectory. AIR stock has a Moderate Buy consensus rating on TipRanks based on seven Buys, four Holds, and two Sell ratings. The Airbus SE share price forecast of €148.46 implies 3.7% upside potential from current levels.
