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Ruscoe
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Invest in Airbus or Boeing

Mon Jun 01, 2020 11:24 pm

I am thinking this is a good time to buy into Airbus or Boeing via the stock market.
So I looked at the figures quoted on Yahoo Finance.
They show that the Market Price for Airbus in Euros is 56.77 in Paris, with a Target price of 121 Euro in one years time and
for Boeing a Market price of 151.39 US$, with a 12mth Target price of $156.
Analyst recommendations for Airbus are 6 strong buy, 13 buy, 6 hold and no sells.
Boeing has 7 strong buy, 12 buy, and 5 hold, and no sells, so not much in that.
Neither company are paying a dividend, so it looks pretty clear that Airbus are expected to provide the best returns over the next 12 months.

Any thoughts?

Ruscoe
 
GalaxyFlyer
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Re: Invest in Airbus or Boeing

Mon Jun 01, 2020 11:27 pm

Don’t go on an anonymous forum for financial advice.
 
Ruscoe
Topic Author
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Joined: Sun Aug 22, 1999 5:41 pm

Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 4:03 am

Why?, but I am not looking for financial advice.
I pay an expensive advisor for that but I am interested to hear what A.neters may think.
It is actually very relevant to the current situation, where neither manufacturer would likely survive without patient investors and the assessment that Airbus will be worth twice as much in 12 months and Boeing roughly the same..
Cheers
Ruscoe
 
Alias1024
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 4:45 am

How old are the analyst notes with price targets? If the Boeing ones are newer than Airbus that could explain the difference.

Also, Wall Street analysts’ recommendations are almost uniformly garbage. The incentives are all wrong.

They almost never put a sell rating on anything because that company’s management will get upset and refuse to give the analyst’s bank any business. They’re even reticent to give hold ratings. Nobody they report to really cares how accurate their ratings are. Analysts are paid to write intelligent sounding fodder for retail investors and salesmen (brokers), while not causing trouble for their investment bank.

Do your own research and thinking on their short and long term prospects. Pull apart their financials, consider likely order deferrals and cancellations, think about government aid potential, etc... Really dig into them. Could be you wind up not liking either one.
It is a mistake to think you can solve any major problems with just potatoes.
 
JayinKitsap
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 5:49 am

Investing in commercial aviation at this point is dangerous. Are we near the bottom or is there a lot still to slide. All of A and B's customers are in dire straits at the moment. Will it be 1 month or 10 before the market returns to even 40% of previous. The airlines will need a year of profitability before even thinking of taking the orders they are already committed. Current deliveries are occurring only because of strict contracts. A years worth of production is probably getting added to the used market.

It's a lot better to see that a bottom has occurred than to get in early. I believe most of the stock decline has occurred but there could be another 10% down before the bottom. Or the stocks could skid sideways for 5 years. When Warren Buffett rode the airline stocks down 80% of the way, then folded with huge losses just to get out is a sign things may not be good for years.
 
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enzo011
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 6:21 am

Isn't this just another way of asking what either companies prospects are for the next 12 months? I see it, in a very crude and non financial way not looking aspects of either company other than aviation, that Boeing has a lot of hurdles they still need to overcome. Not only is the MAX still grounded but the 777X will probably not EIS in 12 months and the 787 delivery rates will suffer from the coronavirus slowdown. Added to the slowing production rates is the deferred production costs, that while it was easily dealt with at 12 per month will eat into profits at 8 or less per month.

Airbus, they have the coronoavirus hurdles that Boeing is also dealing with. So you would think if the 787 hurdles are eased for Boeing it is eased for all Airbus products, so from my point of view the recovery for Airbus is a lot less complicated.

Add in the unrest in the US at the moment, who knows.
 
Sokes
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 3:55 pm

Alias1024 wrote:
Also, Wall Street analysts’ recommendations are almost uniformly garbage. The incentives are all wrong.

Did bank analysts warn people of buying credit default swaps or other such products?
Why would somebody as a profession give free advise? What's his incentive?

Suppose you are a super rich and want to sell a big chunk of a stock. How do you find buyers?
I once read about fantastic stocks which only go up. A chart of the Wrigley stock was given. And indeed, for forty years it was mostly up. So I bought it. Within a few weeks the stock lost IIRC 40% or so. Somebody wanted to offload stock. I was the fool to buy it. The analyst arranged for the deal.
You better listen to Alias 1024. I assume there should be good paid advisors. For free advise as for political developments the question always is:
"Cui bono?"
https://en.wikipedia.org/wiki/Cui_bono

Will Boeing or Airbus be better?
-Will US defense spending increase/ decrease?
-How good is GE's new engine?
-Who will get more help from politics?
-Is China going to buy Boeing again?
-Will other countries certify the Max?
-If production slots for A320s become available, will airlines prefer it over B737 Max?
-Long term: suppose engine makers next make a MOM engine. Will it be optimized for B767 or a short A330?

The big unknown: what is the world economy going to do? Zero interest policy was earlier only tried in Japan. But Japan is industrialized with a shrinking population. Who can know what will happen?
Do you like the policies of Boeing management and board?
In short: I can't answer your question.
Why can't the world be a little bit more autistic?
 
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Dutchy
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 6:23 pm

Ruscoe wrote:
Any thoughts


Yes, I have a thoughy, Ruscoe, it is very hard to get more financial returns than the market.

But I agree that Airbus has more of a chance to get a stronger performance than Boeing. I feel that in the stock price Boeing is still to high and isn't fully priced: MAX-disaster and 777X whoows etc.

My two cents......
Many happy landings, greetings from The Netherlands!
 
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trpmb6
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 7:10 pm

I think Boeing is undervalued currently. Despite max cancellations they still have a huge backlog. What I think is even more interesting is that their attention is now diverted away from a likely loser in the middle market aircraft. Instead they will now be forced to move to a new single aisle aircraft which is a cash cow in the future. Keep in mind they also have a huge defense portfolio.

I'm not as familiar with Airbus, but they are in a good position. However, I think their stock isn't discounted as much as Boeing's. When the 737max is recertified I expect Boeing's stock to rise while Airbus will still flat or fall on the news.

Boeing has more upside imo.

But why look at the OEMs? And specifically the big two commercial OEMs? Why not look at defense related names like the new Raytheon technologies (merger between Raytheon and UTI)? Suppliers are out there who are well diversified across commercial, defense and with multiple OEMs which helps them weather the storm well in situations like this.

Disclosure, I am long in several aviation companies. Some possibly listed here, some not. I am not a financial advisor.
 
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Dutchy
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 9:07 pm

trpmb6 wrote:
I think Boeing is undervalued currently.


Really? The current stock price is almost the same as in 2016. I think the company is worse off than at the moment in time, so I think the stock price should reflect that.
Many happy landings, greetings from The Netherlands!
 
Dmoney
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 9:36 pm

Dutchy wrote:
trpmb6 wrote:
I think Boeing is undervalued currently.


Really? The current stock price is almost the same as in 2016. I think the company is worse off than at the moment in time, so I think the stock price should reflect that.



Boeing has great competitive moats and smart people, I'm sure it'll make buckets of cash over the next 20 years. Especially give the US is an oligopoly.

But long term it looks like a broken company. US capitalism ruined it like it ruins many companies in the hunt for finacialiazed returns. The remind me of what happend to ICI. Great scientists and engineers want to do exciting interesting prestigious projects and money isn't the primary motivator. It's amazing what you can achieve with a strong bound motivated team. Boeing used to make the best airplanes in the world and the money followed. Wasn't much more complicated than that.

You can't manage and measure the output of professionals that closely. I'm sure they'll turn out plenty more decent projects with their MBA managers but they aren't an engineers company anymore. People will do their work because they get paid and then go home. If you want to build great things I'd imagine they'll work elsewhere. Boeing are going to wither eventually.
 
rfields5421
Posts: 6264
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Re: Invest in Airbus or Boeing

Tue Jun 02, 2020 10:26 pm

My opinion:

NO

While both are too 'big' or 'vital' for the governments to allow them to fail, either or both, are prime candidates for a restructuring bankruptcy/ administration.

In such case, the major suppliers, the major creditors who are large banks and investment firms will come out owning most of the resulting company.

But the people like you and me will be left with nothing..

Sorry. That's my opinion. Now if I had a few tens of millions to invest and it was less than 0.05% of my net worth, it might be a decent investment. Folks make big money with big RISKS which pay off. But never make such a risky investment with money you are not ready and willing to lose.
Not all who wander are lost.
 
889091
Posts: 189
Joined: Sat Apr 06, 2019 7:56 pm

Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 12:08 am

All it would take will be for Covid-20 to pop up and say hello during winter....
 
Ken777
Posts: 10046
Joined: Thu Mar 11, 2004 5:39 am

Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 6:05 am

Wait until more information is available on Covid-19, research performance and potential for multiple vaccines.

iN the meantime look for states paying a dividend (like Apple) and take the dividends until the airlines really start performing.
 
Jalap
Posts: 639
Joined: Thu Oct 18, 2007 4:25 pm

Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 5:39 pm

There'll be a lot of 2nd hand relatively new planes available soon because airlines will shrink or go bankrupt.
At some point, there'll also be a lot of 737Max's entering service, again driving many planes to the 2nd hand market. They'll probably be the older planes though.

I fear a large 2nd hand market could hurt sales of new planes.
If anything, it's the dismantling companies that are about to enter a golden age...
 
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trpmb6
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Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 6:25 pm

<shrug> if you had listened to me yesterday you'd be up 10% today.

But what do I know.
 
stlgph
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Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 6:53 pm

if aviation is a hobby/strong interest of yours, i'd say stay away because you're just going to end up frustrated with your hobby and your wallet.

also, these stocks are really something you don't want to just be in the game for for only 12 months.

however, if you can put money in and absolutely hold the position for 10 years...
if assumptions could fly, airliners.net would be the world's busiest airport
 
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Dutchy
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Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 7:35 pm

trpmb6 wrote:
<shrug> if you had listened to me yesterday you'd be up 10% today.

But what do I know.


I would be impressed in a year time, taking into account the risk involved.
Many happy landings, greetings from The Netherlands!
 
fsnuffer
Posts: 207
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Re: Invest in Airbus or Boeing

Wed Jun 03, 2020 10:49 pm

I invested in Boeing when it was at $126. I also just purchased Spirit at $19. I feel all of the risk has been priced into the share price at this point. There will be a bump once the MAX is certified again. Boeing at one point was trading north of $300. As airlines downsize temporarily due to demand I feel the 777x program will suffer but the 787 and 737 lines will rebound. Have not done a lot of research into Airbus.

As a rule, I stay away from airline stocks. Too much boom or bust. The issue is when they go bust they declare bankruptcy and your stock goes to zero.
 
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trpmb6
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Re: Invest in Airbus or Boeing

Thu Jun 04, 2020 4:05 pm

fsnuffer wrote:
I invested in Boeing when it was at $126. I also just purchased Spirit at $19. I feel all of the risk has been priced into the share price at this point. There will be a bump once the MAX is certified again. Boeing at one point was trading north of $300. As airlines downsize temporarily due to demand I feel the 777x program will suffer but the 787 and 737 lines will rebound. Have not done a lot of research into Airbus.

As a rule, I stay away from airline stocks. Too much boom or bust. The issue is when they go bust they declare bankruptcy and your stock goes to zero.


Bravo, you have made a lot of money this week. So have I. If I cash out that is, which I don't intend to.

I agree with your assessment and I have made the same assessment as well. Boeing and Spirit and GKN and Triumph they were all suppressed pre-covid due to the Max issue. Then Covid hit and people wrongly assumed that Covid + Max were a double whammy. In reality, they were not. The max recert effort had already accounted for the fact that they would be at lower production levels on the Max. So add in Covid and you find that your new airplane demand is in line with what Boeing would have been forced to produce airplanes at anyways, due to the max recert efforts.

That is why you should be long Boeing right now because they still have a massive backlog that will not go away. Covid is not going to change people's travel behaviors the way pundits are making it sound. Just look at how people are acting right now flocking to restaurants once they reopen. cruises are seeing huge rebookings due to discounted rates and will rebound quickly.

Is there still risk? Absolutely. But the train has left the station, I jumped into the first or second car, the caboose is coming quick and a lot of folks are already moving their money into these stocks.

BA is up another 7% today. The OP was made on June 2 where BA had a low of 152.60. Current price is 185.06. Airbus stock was at 62.55 on June 2, now sits at 71.98. 21% return vs 15% return. Eitherway I'd be happy. And considering the boost BA will get when max is recertified I see a higher risk/reward for BA than I do for Airbus. I think that's why you see the difference in returns this week when both should be performing about the same given the positive news and improving airline optimism amid higher bookings.
 
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Aesma
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Re: Invest in Airbus or Boeing

Fri Jun 05, 2020 2:42 am

The Fed is printing and printing and printing and printing so basically any US stock can only go up as long as this continues.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
planewasted
Posts: 541
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Re: Invest in Airbus or Boeing

Fri Jun 05, 2020 10:07 am

Don't trust people who say it it over or under valued. Few, if any, can predict future stock prices except that it is likely that they will go up over a looong time period. The important thing to understand is that the airline industry is a high risk sector now. So potential for both high wins and losses compared to other sectors.
 
Sokes
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Re: Invest in Airbus or Boeing

Fri Jun 05, 2020 11:11 am

trpmb6 wrote:
Bravo, you have made a lot of money this week. So have I. If I cash out that is

How true. Once you sold you can say you made a profit. Not before that.

Aesma wrote:
The Fed is printing and printing and printing and printing so basically any US stock can only go up as long as this continues.

That's true for the overall market. It may not be true for a single company.

I think the culture factor is missing in this discussion. What can very smart engineers do if management has it's own agenda?
Why can't the world be a little bit more autistic?
 
jetwet1
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Re: Invest in Airbus or Boeing

Sat Jun 06, 2020 4:40 am

Remembering, this is an aviation website, so any info gained here should be taken with a huge grain of salt....

I wouldn't touch either of them, there are just to many negatives in the marketplace for me. I do have a bankroll I use for my risky investments, right now 50% of that is sitting in bonds, the other 50% is in NCL, that was only because, when it comes down to it, I invest in people more than companies, if a company (like NCL has Frank Del Rio) I am more likely to invest in them over say, Groups Artemis who really are showing how leadership in a crisis should not work.

Sorry for the obscure references, in the end it comes down to research and a little luck.
 
MrBretz
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Re: Invest in Airbus or Boeing

Sat Jun 06, 2020 9:43 pm

This is a strange topic for TechOps. In hindsight, you should have bought Boeing when it dipped below $100 a share in early March. It was just over $200 a share yesterday.

I have a friend who bought them for their dividend at around $120 many years ago. I kept telling him to sell when it was in the $300 to $400 range but he didn’t want to pay capital gains. Instead he dumped it at just over what he bought it a few months ago. Now he laments doing that.

Maybe we can get back to TechOps.
 
jetwet1
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Re: Invest in Airbus or Boeing

Sat Jun 06, 2020 10:19 pm

MrBretz wrote:
This is a strange topic for TechOps. In hindsight, you should have bought Boeing when it dipped below $100 a share in early March. It was just over $200 a share yesterday.

I have a friend who bought them for their dividend at around $120 many years ago. I kept telling him to sell when it was in the $300 to $400 range but he didn’t want to pay capital gains. Instead he dumped it at just over what he bought it a few months ago. Now he laments doing that.

Maybe we can get back to TechOps.


The thread is in non-av...
 
DLFREEBIRD
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Re: Invest in Airbus or Boeing

Sun Jun 07, 2020 12:21 am

I have more faith in Airbus than Boeing, my BIL in charge flight training for Airbus in Miami / now Denver, and everything he tells me makes me respect the company more and more. I can't say that about Boeing. He's been with Airbus since 1990.
 
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trpmb6
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Re: Invest in Airbus or Boeing

Mon Jun 08, 2020 2:01 pm

BA up another 11% this morning as of this post. Airbus lagging but up as well. I have to wonder if there is a bit of local bias due to airlines within the US also seeing their stocks rise amid increased bookings and improved optimism about covid19. It remains to be seen if the increased demand within the US would translate to increased demand worldwide. All of this and they still haven't delivered a single Max in 2020.

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