The Boeing Company is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide.
The company also provides leasing and product support services. Boeing is among the largest global aerospace manufacturers; it is the fifth-largest defense contractor in the world based on 2017 revenue, and is the largest exporter in the United States by dollar value. Boeing stock is included in the Dow Jones Industrial Average.
Airbus SE is a European multinational aerospace corporation that stood as the world's second biggest aerospace and defence company in 2018. Registered in the Netherlands and trading shares in France, Germany and Spain, Airbus designs, manufactures and sells civil and military aerospace products worldwide and manufactures in the European Union and various other countries. The company has three divisions: Commercial Aircraft, Defence and Space, and Helicopters, the third being the largest in its industry in terms of revenues and turbine helicopter deliveries.
Boeing and Airbus are a duopoly in the world of aviation and both stocks have performed very well, except Boeing's that is currently under investigation for its model 737-max that was grounded during march 2019 due to the model's involvement in accidents.
Lawsuits from bereaved family members of victims from the accidents are as of this time being brought forward, and investigations into the architecture of the 737-max plane are being performed, setting a cap on the stock's potential growth until all uncertainties have disappeared. Future concluded investigations and lawsuits ought to remove Boeing's ceiling of stock growth.
Both companies have a unique advantage due to their duopolistic stance, virtually shielding them from any competition and cementing their power in aviation.
Analysing the latest global passenger aviation data from the World Bank, one clearly sees that there is room for more growth for both companies, as living standards across the world are rising, and globalisation increasing the need for commercial flight-travel;
P/E = 37.9x - Boeing
P/E of 24.92x- Airbus
I would therefore set a target price of 150€ for Airbus and 350$ for Boeing, with Airbus reaching until the years end of 2019 (Q4*) and Boeing taking substantially longer until the investigations are concluded - Q1 & Q2 - 2020.
Profiting strategies on the future developments surrounding the stocks are numerous;
1. Purchasing a deep-in-the-money call-options with a strike at 125€ for Airbus and 325$ for Boeing, (with an expiry 1-1.5 years in to the future*) would offer substantial leverage. Basically entering a synthetic-long-stock position.
2. Purchasing the stocks themselves.