Airbus vs. Boeing Fundamental Analysis
To paraphrase from John Denver, Japan Airline Co. (TOKYO:9201) better known as JAL has packed its bags and is ready to fly Airbus. Following consolidation of the industry in the early 2000s and an additional sale of stock from BAE Systems (LONDON:BA), Airbus is now a subsidiary of European Aeronautic Defence & Space NV (EURONEXT PARIS:EAD). Earlier this year, EAD announced that it would change its name to the Airbus Group, a process that will be completed by the second half of 2014 (hence our interchangeable use of EAD and Airbus in this article). The JAL deal, valued at over $9billion, signals a new phase in the Airbus vs. Boeing rivalry and is a setback for The Boeing Company (NYSE: BA) which has been supplying jets to JAL for over fifty years.
According to a 2013 report from Deloitte, commercial aerospace sector revenues continued double digit growth in 2012. Though revenues as well as earnings in the defense related aerospace sector decreased, the commercial segment saw an 18.3% increase in revenues with 13.2% increase in earnings. Today, we look at Airbus vs. Boeing to see what fundamental analysis on these companies reveals. CapitalCube uses peer-based analysis for its reports; our full peer-set used for this article is listed at the end of this post.
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Strategic Turnaround for Airbus (EAD)
BA's operating performance is better than average (ROE of 56.0% compared to the peer average of 21.0%). However the market does not seem to expect higher growth from BA relative to competitors (PE of 21.4) but simply to maintain its relatively high rates of return.
Airbus vs. Boeing: The Earnings Leader?
Boeing is Supporting Growth
Peer List
Our peer list for today's Airbus vs. Boeing analysis: European Aeronautic Defence & Space NV (EURONEXT PARIS:EAD), The Boeing Company (NYSE: BA), United Technologies Corporation (NYSE: UTX), Lockheed Martin Corporation (NYSE: LMT), Raytheon Company (NYSE: RTN) and Dassault Aviation SA (EURONEXT PARIS:AM). Note that we used CapitalCube's custom peers feature to customize this peer list.
Interested in a summary of all Fundamental characteristics, earnings quality, [glossary_exclude]dividend quality[/glossary_exclude] and likely corporate actions for Airbus vs. Boeing? Get it now!
Related articles from our archives: Clipping the wings on the 777: Boeing Co. (BA) Fundamental Analysis, Boeing Co. (BA) Dividends: Dreamliner Scores?
*The word average in our analysis refers to median.
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