Bernstein Upgrades Airbus To Outperform, Joins Boeing As Bull Plays In Portfolio

On Monday, AB Bernstein issued a company note on Airbus Group SE

as analysts believe that aircraft demand will remain strong. Bernstein upgraded Airbus from Market-Perform to Outperform with a 78 euro price target. Douglas Harned and Christian Laughlin, analysts at Bernstein, wrote, "We view the outlook for commercial aircraft demand as sound, at a time when commercial aerospace stocks are depressed due to macroeconomic fears. Although we have long been positive on the demand outlook for Airbus, we have been concerned about risks associated with A350 development and production increases – concerns that have now dissipated." Analysts at Bernstein gave 2 key reasons why they view strength in Airbus. 1. Demand for planes Analysts at Bernstein revised their outlook for the A350 program citing corporate demand along with strong margins and smooth production. Bernstein expects deliveries to triple in 2016 to 52 units. 2. Valuation Bernstein wrote that Airbus is currently discounted in regards to key competitors and believes that the company's multiple could grow as their airplane models continue to be delivered and earnings are announced. While global economic concerns are still present, Bernstein believes that Airbus can still outperform their competition. Currently, Airbus is trading at $59.78, up 3.95 percent.