Boeing Co share price up, forecasts more deliveries to China

Boeing Co, the worlds largest aerospace company and the biggest passenger-jet supplier to China, upgraded its projection of Chinese demand over the next 20 years to 6 020 airplanes valued at some $870 billion.

The new forecast represents an 8% increase over the previous projection, and bumps China share of total airplane deliveries for the period up to some 16% of the total and 45% of the Asia Pacific region.

“Chinas aviation market is going through dynamic changes,” said Randy Tinseth, Boeing Commercial Airplanes vice president of Marketing. “New business models like low-cost carriers and airplane leasing companies, a new generation of fuel-efficient airplanes and evolving consumer needs are driving demand.”

As the leading supplier of passenger-jets to Chinese airlines, accounting for more than half the market, Boeing saw its market position as favorable to benefit the most from Chinese growth.

Just two weeks ago, Boeing secured an $8.8bn order from Bank of China Aviation, the Singapore-based aircraft leasing subsidiary of BoC. The order for 50 single-aisle 737 Max aircraft, and 30 737-800, as well as two 777 wide-body aircraft, outlines Chinese demand structure, as carriers invest in single-aisle, fuel-efficient and, ultimately, more profitable planes. 72% of the projected 6 020 planes to be delivered to China are single-aisle, 90-230-seated jets.

“These trends will shape demand for an airplane lineup that has high efficiency and low operating costs,” Tinseth added. “We believe Boeings comprehensive portfolio is perfectly aligned to meet those needs.”

Orders for Boeing planes at the Farnborough Airshow in July reached $40.2bn, helping the US economy log some impressive figures for the July and August. The company had earlier reported upbeat Q2 results and upped its full-year earnings projection by some 10%.

Boeing Co closed Wednesdays session at $125.94 per share, up 0.37% for the day and 19.97% on an annual basis, valuing the company at $90.42bn. In Frankfurt today, by 7:53 GMT shares rose 0.46% to €96.00 (~$126.25). According to a Financial Times survey, 22 analysts offering 12-month price targets for The Boeing Company have a median target of $159.50, with a high estimate of $175.00 and a low estimate of $101.00. The median estimate represents a 27.11% increase from the Tuesdays price of $125.48.