The Boeing Company (BA): Plane Manufacturers Are Poised to Take Flight

Boeing and Airbus are in good financial standing

Currently, The Boeing Company (NYSE:BA) has a backlog of $392 billion. This is a staggering amount of revenue already under contract, and covers about seven years of production. Given the projections of rapid growth in the industry, this backlog should increase and Boeing should have a steady revenue stream that increases over time. As a testament to this, deliveries increased 27% in 2012 yet the backlog still increased. That bodes well for The Boeing Company (NYSE:BA).

In terms of traditional metrics, Boeing is in good stead. Its P/E ratio of 19.1 is on par with the industry P/E, and analysts predict sales growth of 10% over the next year as well as a 27% increase in EPS.

If The Boeing Company (NYSE:BA)’s financials are strong, Airbus’ are off the charts. Its backlog totaled more than $638 billion at the end of FY12, an industry record covering well over seven years of production. Its deliveries increased by 10% as well, and the company booked 40.6% more contracts than anticipated. Given internal and external projections, those numbers are indicative of things to come. Airbus’ P/E of 26.4 is well above the industry’s, indicating expectations of strong growth.

Foolish conclusions

Demand is capable of supporting production increases for both Boeing and Airbus, which should increase sales for both companies. They have both hit multi-year highs in recent weeks, but they have potential for strong growth in the future.

There is a large demand for replacements for aging airplanes, and Boeing and Airbus will benefit from that demand, as will United Technologies by proxy. Judging by the strong market share that The Boeing Company (NYSE:BA) and Airbus possess, as well as by the projections for increased demand, it’s safe to say that all three stocks are excellent long-term growth options.

The article Plane Manufacturers Are Poised to Take Flight originally appeared on Fool.com and is written by Hunter Hillman.

Hunter Hillman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Hunter is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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