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Airbus stock shows signs of recovery as orders surge despite global economic uncertainty

Dino Kurbegovic

In February 2022 Airbus (OTCMKTS: EADSF) saw a strong gross order inflow. The A220 gathered 50 orders during February alone which is reflective of the strength of the product. 

Although these numbers need to be compared to the current geopolitical climate to better gauge the enormity of these orders. 

With the pandemic grinding international travel to an almost complete halt in 2021, both Airbus and Boeing (NYSE: BA) had witnessed cancellations or downgrades of confirmed orders. Despite these tailwinds, Airbus finished the year with 611 planes delivered, an increase of 8% compared to 2020.   

As per the company, in 2021 they witnessed a massive increase in orders, a slight increase in deliveries, and a slight decrease in backlog, compared to 2020. Clearly, this indicated that Airbus went from strength to strength during a challenging Covid year. 

Airbus chart analysis 

Airbus continued to perform well into the first quarter of 2022, but as the crisis in Ukraine erupted and investors got spooked, the price of the stock took a severe plunge, from which it has since at least partially recovered.

Source: Nasdaq

Analysts give the stock a strong buy rating, predicting the next 12 months’ average price to be $162.42. This would represent a potential upside of 39.99% from the current $116.02 trading price of the stock. 

Source: TipRanks

Airbus had a good February, despite higher cancellation rates in the first two months of 2022 when compared to 2021, however, more net orders were gathered. Delivers are growing sequentially, but also year-by-year which is a bullish signal for the stock. Operational results are likely to improve this year compared to the same period last year. 

Military aircraft market

Lately, new victories in the military aircraft field were registered by Airbus. For instance, in September 2021 the company inked a deal for the sale of 56 C-295 tactical transport aircraft to India. Development of an entire industrial ecosystem from manufacturing to assembly will take place with their partner Tata Advanced System Limited (TASL) soon.

Investors should keep an eye on how much further will deliveries improve, noting the supply chain stress and the fact that the Russian market will not be able to accept aircraft at this time. 

Rising energy prices and inflation may dampen deliveries and weaken air travel demand. Consequently, investors need to keep track of these developments to properly put this stock into context.  

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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