We Think These Aircraft Engine-Makers Are Undervalued
GE and Rolls-Royce are our top picks in the wide-body commercial aircraft industry.
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Mentioned: General Electric Co (GE)
, AAR Corp (AIR)
, Boeing Co (BA)
, Rolls-Royce Holdings PLC (RYCEY)
Chris Higgins: We recently took a deeper look at the wide-body commercial aircraft market. These are larger jets that seat over 230 passengers and are used on long-haul routes. These aircraft are manufactured by Boeing and Airbus. Wide-body engines are also a duopoly with GE and Rolls-Royce dominating the market.
We project about 8,600 wide-body deliveries over the next 20 years. Our forecast for smaller wide-body demand of roughly 6,400 aircraft is higher than other market forecasts due to our belief that the shift toward smaller wide bodies like the 787 and a smaller variance of the A350 will continue and be more pronounced than most industry analysts believe with negative implications for Boeing's 777X and for Airbus' A350-1000.
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Chris Higgins does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.