The Boeing Company BA recently secured an order from Emirates SkyCargo, the cargo unit of Emirates Airlines, to supply five 777 Freighters. This contract win should significantly boost Boeing’s commercial airplane business segment.
With the latest purchase, Emirates’ order for Boeing’s wide-body aircraft includes 10 777 Freighters.
About 777 Freighters
The Boeing 777 Freighter is a very competent, wide-body twin-engine freighter that can carry more cargo than any other twin-engine cargo aircraft, with a maximum payload capacity of 112 tons (102 metric tons) and a range of 4,970 nautical miles (9,200 km).
Owing to these capabilities, 20% of all air freight worldwide is transported by this Boeing freighter as of March 2024.
Boeing’s Growth Prospects
With the rise of e-commerce, the revival of international trade and fleet modernization, the worldwide freighter aircraft market has been expanding significantly. This trend is further supported by the growing need for technologically advanced freight transport and increased demand for freight charter services.
To this end, Boeing forecasts the air cargo traffic, measured in revenue ton kilometers, to grow an average of 4.1% annually from 2022 to 2041. With freighters constituting approximately 70% of all air cargo traffic as of 2021, the aforementioned projection offers ample growth opportunities to Boeing, which enjoys an already established position in the freighter market. Impressively, BA provides more than 90% of the worldwide dedicated freighter capacity.
Once the 777-8 Freighter starts getting delivered in 2027, as expected, which comes with 30% lower fuel usage and emissions from similar kinds of freighters, Boeing will be able to grab an increased share of the air cargo traffic growth.
Opportunities for Peers
Apart from Boeing, other prominent aerospace players that have a strong presence in the freighter market and thus are also expected to gain from the growing air cargo traffic are mentioned below:
Airbus Group EADSY: The company provides a range of freighters with different capacities and capabilities. Its A330-200F is a new-generation cargo aircraft, while A330P2F, A320P2F and A321P2F are passenger aircraft that have been converted to a freighter.
Airbus has a long-term (three to five years) earnings growth rate of 13.9%. The Zacks Consensus Estimate for EADSY’s 2024 sales calls for an improvement of 6.9% from the prior-year reported figure.
Textron Inc. TXT: Its Cessna SkyCourier freighter is a multi-purpose twin-engine aircraft built for cargo transport. It transports diverse things efficiently because of its large cabin volume and high payload capacity. Its durable build, short takeoff capabilities and superior avionics make it an excellent choice for regional freight services.
Textron boasts a long-term earnings growth rate of 10.1%. The Zacks Consensus Estimate for TXT’s 2024 sales implies an improvement of 5.7% from the prior-year reported figure.
Lockheed Martin Corp. LMT: Its LM-100J performs as a civil multi-purpose air freighter capable of rapid and efficient transport of cargo. Its superior avionics and durable build make it suitable for a variety of tasks, including humanitarian aid, disaster relief and logistics support.
Lockheed Martin boasts a long-term earnings growth rate of 4.1%. The Zacks Consensus Estimate for LMT’s 2024 sales suggests an improvement of 3.2% from the prior-year reported figure.
Price Movement
In the past three months, shares of Boeing have risen 9.3% compared with the industry’s growth of 2.3%.
Image Source: Zacks Investment Research
Zacks Rank
Boeing currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>The Boeing Company (BA) : Free Stock Analysis Report
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
Textron Inc. (TXT) : Free Stock Analysis Report
Airbus Group (EADSY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
