Boeing (BA) signs agreement for four 777 cargo planes – January 7, 2022

The Boeing Company (BA Free Report) recently won an order from Atlas Air Worldwide, a world leader in air freight, for the delivery of four of its 777 cargo planes amid growing demand for freighters around the world. Already operational with 14 777 cargo planes, Atlas Air is now expanding its 777 cargo family with this new order. The new order expands Atlas Air’s fleet of 777s with additional capacity, energy efficiency and operational flexibility for its customers.

Boeing also marked record growth for its cargo family in 2021 and demonstrated its ability to capitalize on the growing e-commerce market. Until November 2021, the company outdid itself in the field of cargo aircraft by surpassing the previous cargo record comprising 80 orders for new production freighters and more than 80 orders for converted models.

Importance of the cargo plane 777

The 777 cargo plane is the largest, longest range and best performing twin-engine cargo ship in the world, featuring the lowest travel cost and highest reliability of any large cargo ship. With a range of 4,970 nmi (nautical mile) (9,200 km), the 777 Freighter can carry a maximum payload of 102 tons (224,900 lb).

It also has environmentally friendly features as it requires less fuel and CO2 emissions compared to previous aircraft. Its exceptional capacity and efficiency translates into substantial savings for freight operators, with fewer downtime and associated landing costs.

These characteristics of the aircraft, supported by the growing demand for freight, attracted several customers, resulting in multiple orders for Boeing.

Growth prospects

The emerging trend in the e-commerce market has strengthened the air cargo market, thereby increasing the prospects for companies like Boeing which manufactures cargo ships. According to the International Air Transport Association, global air cargo demand rose 9.1% in September, underscoring continued robust demand.

Given the strong growth trends in the air cargo market, BA is expected to benefit as it is a leading global aerospace company. The current agreement with Atlas Air is proof of this.

Boeing predicts that the global cargo fleet will grow by 70% over the next 20 years. This highlights Boeing’s strong outlook for long-term cargo aircraft.

Peer Perspectives

The strong growth trend in the air cargo market will benefit not only Boeing but also aircraft manufacturers, namely Airbus SE (EASY Free report).

Airbus SE cargo and freighter aircraft include the A330-200F, A321P2F, A330P2F BelugaST and BelugaXL. The company’s newest freighter is the A350F, which brings the latest generation innovation to the A350 and reduces fuel consumption and CO2 emissions. The A330-200F is a new generation cargo aircraft that meets the needs of the freight business in the medium and long-haul segment.

Zacks’ consensus estimate for Airbus earnings in 2021 shows a 584% improvement over last year’s figure. Airbus shares returned 20.7% last year.

Price return

Boeing shares are down 0.6% in the past year compared to the industry’s 29.2% drop.

Image source: Zacks Investment Research

Rank of Zacks and choice of keys

Boeing wears Zacks Rank # 3 (Hold). Some higher ranked stocks in the same sector are Embraer SA (ERJ Free report) and Elbit Systems (ESLT Free Report), each carrying a Zacks Rank # 2 (Buy). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Embraer’s third quarter revenue was $ 958.1 million, up 26.3% year over year. Zacks’ consensus estimate for Embraer’s sales in 2021 shows 19.5% year-over-year growth.

Embraer’s long-term profit growth rate is set at 17%. ERJ shares have returned a whopping 153.2% value to its investors over the past year.

Elbit Systems ‘quarterly profit of $ 2.33 per share topped Zacks’ consensus estimate of $ 1.85, delivering a surprise profit of 25.95%.

Zacks’ consensus estimate for Elbit Systems 2022 earnings rose 2.2% in the past 60 days to $ 9.10 per share. The ILEC stock has appreciated 36.9% over the past year.

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