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Airbus and Boeing, the two giant competitors in the aerospace industry, have had a storied rivalry that extends beyond business. Recently, this rivalry caught the attention of French Finance Minister Bruno Le Maire, who expressed a clear preference for Airbus, emphasising the brand's safety record. With the contrasting fortunes of both companies impacting investor sentiment, the debate on which stock is a safer investment has been ignited. Let's explore.
Boeing's Missteps and Airbus's Advancements
The wake of two tragic Boeing 737 Max plane crashes in 2018 and 2019, alongside other technical mishaps, have cast a shadow over Boeing's reputation. The incidents heavily affected its stocks and allowed Airbus to gain an edge. In contrast to Boeing’s downfall, Airbus has seen its stock value rise, capitalising on its rivals' issues. Fast forward to today, Airbus's more stable stock and a larger market cap tilt the balance in its favour.
Industry Impact and the Investor Dilemma
The struggles of Boeing, however, are a concern for the industry as a whole. Airbus CEO Guillaume Faury emphasised that technical challenges faced by one player affect the reputation of the entire aerospace industry where safety is paramount. Nonetheless, the French minister’s preference for Airbus persists given the French government's interests in Airbus. This scenario raises a pertinent question: Does Airbus promise a safer investment than Boeing?
Analysts Take: Past Performance and Future Potential
While Airbus appears to be in a stronger position currently, an evaluation by InvestingPro highlights a differing future projection. Despite Boeing’s shortcomings, data indicates it may have greater growth potential with its current shares considered undervalued and with an average future target price significantly higher than the current price.
A Future of Opportunities
Airbus’s stock, conversely, is almost at its target price with a slight room left for growth. Therefore, while Airbus may be leading the race currently, Boeing could potentially offer greater returns if it effectively solves its safety issues. The future, so it seems, could still have chapters unwritten in this long-standing rivalry.
