There is room in the aerospace market for new firms to show up. Aerospace giant Boeing BA -0.85% ▼ has a massive book of outstanding business, with a backlog of about 6,100 planes outstanding. Its immediate competitor Airbus EADSY -1.82% ▼ is no better, with a backlog measuring over 9,200 planes. That means there are a lot of airlines waiting for delivery, and a lot of opportunity for any other business to step in…assuming they can meet the massive barriers to entry. Some firms are actually trying, and this news dealt Boeing shares a fractional loss in Monday afternoon’s trading.
One of the competitors in question is Embraer EMBJ +0.43% ▲ , when it took the unexpected step of giving the statue of Christ the Redeemer in Rio de Janeiro a holographic jersey with the Embraer logo on it. This move was apparently not controversial, as it was blessed by a local priest. Now, Embraer is looking to step things up, and move into Boeing’s territory formally by building narrow-body jets.
Embraer has considered such a move before, but it is likely the sheer size of the two main companies’ bottlenecks that is forcing it to reconsider. Carriers from all over have reportedly been contacting Embraer, hoping to get it into the field to shorten the delivery times from their current “eventually” to something more concrete. This could be a problem for Boeing, but reasonably, even if Embraer managed to match Boeing for production, the worst it would likely do is cut Boeing’s backorder from several thousand planes to a couple thousand and change.
And Then There’s JetZero
While Boeing may not have had much to worry about from Embraer, another planemaker, private company JetZero, is also looking to step in. JetZero reportedly broke ground on its first full aircraft factory to start up in Greensboro, North Carolina. Reports noted that the new factory is about twice the size of Boeing’s Everett plant, and will produce the Z4 blended-wing aircraft.
JetZero is looking to put $4.7 billion worth of investment into North Carolina as a result of this construction. It likely helped that North Carolina offered up what was described as “…the largest state incentive package ever offered to a start-up in any industry.”
Is Boeing a Good Stock to Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BA stock based on 15 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 10.64% rally in its share price over the past year, the average BA price target of $274.14 per share implies 23.91% upside potential.