The Boeing Company BA recently secured an order from Japan Airlines to supply 17 of its 737-8 commercial aircraft. These jets, along with the 21 aircraft earlier ordered in March 2023 by Japan Airlines, are expected to be delivered by 2026.
This contract win should significantly boost Boeing’s commercial airplane business segment.
A Note on Boeing’s 737 MAX Jets
The 737-8 is the third largest model in the 737 MAX family, capable of carrying up to 210 passengers and flying up to 3,500 nautical miles (6,480 km). It reduces fuel use and emissions by 20% compared with the airplanes it replaces. The 737 MAX family brings higher efficiency, environmental performance and comfort for passengers to the single-aisle market.
Such remarkable features must have bolstered the demand for this jet family, translating into solid order growth for this aircraft. This is further evident from the latest contract win.
Boeing’s Global Prospects
Rising air passenger traffic, backed by enhanced air travel among normal passengers and executives, along with the increasing demand for fuel-efficient and modern aircraft, is driving growth in the commercial aviation market.
This is likely to have prompted the Mordor Intelligence firm to forecast a compound annual growth rate of more than 6.5% for the commercial aviation market during the 2025-2030 time period. Undoubtedly, such solid market growth prospects offer strong expansion opportunities for Boeing, one of the largest commercial jet makers in the world.
Boeing already enjoys a strong business footprint globally and has been the manufacturer of premier commercial jetliners for decades. The company’s commercial portfolio includes 737, 767, 777 and 787 families of aircraft, as well as the Boeing Business Jet line. More than 10,000 Boeing-built commercial jetliners are currently in service globally, accounting for nearly half of the global fleet.
Opportunities for Other Aerospace Companies
Apart from Boeing, other prominent aerospace players that have a strong presence in the commercial aircraft market and are also expected to gain from the growing air traffic trends are mentioned below:
Airbus Group EADSY: The company has more than 12,000 commercial aircraft in service around the globe. Its product line of passenger aircraft includes A220 Family, A320 Family, A330 Family, A350 Family and A380.
Airbus has a long-term (three to five years) earnings growth rate of 7.5%. The Zacks Consensus Estimate for EADSY’s 2025 sales calls for an improvement of 6.5% from the prior-year reported figure.
Embraer S.A. ERJ: The company is the third-largest manufacturer of commercial aircraft in the world. Its product portfolio of commercial jets includes E175-E2, E190-E2 and E195-E2, which are the world’s most sustainable single-aisle aircraft, shaping commercial aviation.
Embraer delivered an average earnings surprise of 138.39% in the last four quarters. The Zacks Consensus Estimate for ERJ’s 2025 sales implies an improvement of 15.1% from the prior-year reported figure.
Textron Inc. TXT: The company offers a wide range of commercial aircraft solutions, particularly business jets. Its product portfolio includes a handful of business aircraft like the Cessna Citation M2 Gen2, Citation CJ3+, Citation CJ4 Gen2, Citation XLS Gen2, Citation Latitude and the Citation Longitude.
Textron boasts a long-term earnings growth rate of 10%. The Zacks Consensus Estimate for TXT’s 2025 sales suggests an improvement of 6.9% from the prior-year reported figure.
BA Stock Price Movement
In the past six months, shares of Boeing have risen 10.4% against the industry’s decline of 7.4%.
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BA’s Zacks Rank
Boeing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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