We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Boeing (BA) Forecasts Robust Growth in China's Aviation Market
Read MoreHide Full Article
The Boeing Company (BA - Free Report) recently revealed impressive projections for the China aviation market. In particular, it expects China to acquire 8,600 new airplanes valued at approximately $1.4 trillion over the next 20 years, with commercial aviation services valued at $1.7 trillion. This estimate reflects a solid 7% improvement over the last year’s forecast made by the company, indicating an expected robust recovery amid the COVID-19 pandemic.
Boeing revealed its outlook on the China aviation market as part of the 2020 Commercial Market Outlook (CMO), based on anticipated demands for commercial airplanes and services.
A Brief on Boeing’s 2020 China CMO
The U.S. aircraft giant anticipates China’s annual passenger traffic growth to be 5.5% over the next two decades. During this period, Boeing forecasts China to witness demand for 6,450 new single-aisle airplanes and 1,590 widebody airplanes.
Over the long run, the aviation industry growth in China is expected to boost demand for 395,000 commercial pilots, cabin crew members and aviation technicians to fly and maintain the country’s airplane fleet.
Interestingly, approximately 25% of aviation growth worldwide in the last decade was from China. Keeping in mind this immense growth history, Boeing forecasts such a robust trend to continue over the next 20 years.
What Led to Chinese Aviation Market Growth?
Per a report by Informa Markets, China became the world's largest aviation market in April 2020, by seats, overtaking the United States, which has held the top position for as long as aviation has existed. The nation's demographic dividend, increased economic growth and growing urbanization have been the pivotal reasons behind the robust expansion of China’s aviation industry.
Last year, China's civil aviation industry reported annual revenues of approximately $154.27 billion, reflecting a 5.4% year-over-year increase, according to the Civil Aviation Administration of China (CAAC). Also, per CAAC statistics, China’s civil aviation industry operated 660 million passenger trips and 7.52 million metric tons of air cargo, reflecting a year-over-year increase of 7.9% and 1.9%, respectively.
Boeing’s Opportunities in China
Boeing is one of the major aircraft manufacturers in the world, alongside Airbus. Evidently, the aircraft giant has been able to gain widespread popularity and expand its footprint in the world's current largest aviation market. More than 50% of all commercial jetliners operating in China are Boeing airplanes and the company has a component role in current Boeing commercial airplane models, such as the 737, 747, 767, 777 and 787 Dreamliner.
Boeing further anticipates China to lead passenger travel on a global scale in the next few years, despite near-term challenges rising from the prolonged COVID-19 pandemic. In March, as the International Air Transport Association (IATA) already predicted China to fly around 1.3 billion passengers every year, over the next three years, these overwhelming projections indicate the company's growth in China.
China currently has the world’s highest e-commerce growth rate. Per Boeing, there lies a significant scope for the expansion of air express shipping, which in turn would increase the demand for new and converted freighters and associated digital solutions. In fact, launched in 2016, and converted exclusively in China with Boeing joint venture partners, known as STAECO, the 737-800BCF (Boeing Converted Freighter) is completed in China where e-commerce and global trade drive air cargo growth.
Considering this solid footing of Boeing in the China aviation market, the latest projections in all probability will allow the U.S. jet maker to reap the benefits of the nation’s expanding jet market.
Price Performance
Shares of Boeing have gained 49.5% in the past six months compared with the industry’s growth of 11.9%.
Textron delivered an average four-quarter earnings beat of 54.24%. The Zacks Consensus Estimate for fiscal 2021 earnings has risen 66.4% to $2.74 per share in the past 90 days.
AAR Corp. delivered an average four-quarter earnings beat of 105.26%. The Zacks Consensus Estimate for 2021 earnings has risen 187.5% to 92 cents per share in the past 90 days.
CAE Inc. delivered an average four-quarter earnings beat of 28.35%. The Zacks Consensus Estimate for fiscal 2022 earnings has risen 13.8% to 74 cents per share in the past 90 days.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Image: Bigstock
Boeing (BA) Forecasts Robust Growth in China's Aviation Market
The Boeing Company (BA - Free Report) recently revealed impressive projections for the China aviation market. In particular, it expects China to acquire 8,600 new airplanes valued at approximately $1.4 trillion over the next 20 years, with commercial aviation services valued at $1.7 trillion. This estimate reflects a solid 7% improvement over the last year’s forecast made by the company, indicating an expected robust recovery amid the COVID-19 pandemic.
Boeing revealed its outlook on the China aviation market as part of the 2020 Commercial Market Outlook (CMO), based on anticipated demands for commercial airplanes and services.
A Brief on Boeing’s 2020 China CMO
The U.S. aircraft giant anticipates China’s annual passenger traffic growth to be 5.5% over the next two decades. During this period, Boeing forecasts China to witness demand for 6,450 new single-aisle airplanes and 1,590 widebody airplanes.
Over the long run, the aviation industry growth in China is expected to boost demand for 395,000 commercial pilots, cabin crew members and aviation technicians to fly and maintain the country’s airplane fleet.
Interestingly, approximately 25% of aviation growth worldwide in the last decade was from China. Keeping in mind this immense growth history, Boeing forecasts such a robust trend to continue over the next 20 years.
What Led to Chinese Aviation Market Growth?
Per a report by Informa Markets, China became the world's largest aviation market in April 2020, by seats, overtaking the United States, which has held the top position for as long as aviation has existed. The nation's demographic dividend, increased economic growth and growing urbanization have been the pivotal reasons behind the robust expansion of China’s aviation industry.
Last year, China's civil aviation industry reported annual revenues of approximately $154.27 billion, reflecting a 5.4% year-over-year increase, according to the Civil Aviation Administration of China (CAAC). Also, per CAAC statistics, China’s civil aviation industry operated 660 million passenger trips and 7.52 million metric tons of air cargo, reflecting a year-over-year increase of 7.9% and 1.9%, respectively.
Boeing’s Opportunities in China
Boeing is one of the major aircraft manufacturers in the world, alongside Airbus. Evidently, the aircraft giant has been able to gain widespread popularity and expand its footprint in the world's current largest aviation market. More than 50% of all commercial jetliners operating in China are Boeing airplanes and the company has a component role in current Boeing commercial airplane models, such as the 737, 747, 767, 777 and 787 Dreamliner.
Boeing further anticipates China to lead passenger travel on a global scale in the next few years, despite near-term challenges rising from the prolonged COVID-19 pandemic. In March, as the International Air Transport Association (IATA) already predicted China to fly around 1.3 billion passengers every year, over the next three years, these overwhelming projections indicate the company's growth in China.
China currently has the world’s highest e-commerce growth rate. Per Boeing, there lies a significant scope for the expansion of air express shipping, which in turn would increase the demand for new and converted freighters and associated digital solutions. In fact, launched in 2016, and converted exclusively in China with Boeing joint venture partners, known as STAECO, the 737-800BCF (Boeing Converted Freighter) is completed in China where e-commerce and global trade drive air cargo growth.
Considering this solid footing of Boeing in the China aviation market, the latest projections in all probability will allow the U.S. jet maker to reap the benefits of the nation’s expanding jet market.
Price Performance
Shares of Boeing have gained 49.5% in the past six months compared with the industry’s growth of 11.9%.
Zacks Rank & Stocks to Consider
Boeing currently carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the same sector are AAR Corp. (AIR - Free Report) , Textron Inc. (TXT - Free Report) and CAE Inc.(CAE - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Textron delivered an average four-quarter earnings beat of 54.24%. The Zacks Consensus Estimate for fiscal 2021 earnings has risen 66.4% to $2.74 per share in the past 90 days.
AAR Corp. delivered an average four-quarter earnings beat of 105.26%. The Zacks Consensus Estimate for 2021 earnings has risen 187.5% to 92 cents per share in the past 90 days.
CAE Inc. delivered an average four-quarter earnings beat of 28.35%. The Zacks Consensus Estimate for fiscal 2022 earnings has risen 13.8% to 74 cents per share in the past 90 days.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
Download Marijuana Moneymakers FREE >>