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Boeing, Green Africa Airways Ink $12B Deal for 100 737 Jets

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The Boeing Company (BA - Free Report) recently announced that it has signed an agreement worth $11.7 billion with Nigeria-based Green Africa Airways for delivering 100 737 MAX 8 aircraft comprising 50 firm aircraft and 50 options. The deal marked the largest jet contract ever inked between Boeing and African airlines.  

Boeing’s 737 Max

Boeing 737 MAX is enjoying brisk demand in the single-aisle market for its fuel efficiency and low carbon dioxide emissions. Powered by Commercial Fan Motor (CFM) International LEAP-1B engines, the Advanced Technology winglet of this airplane enhances its performance.

Additionally, the pivoting overhead stowage bins add to the spaciousness of the cabin. The bins lend passengers enough room to keep a carry-on roll-a-board near their seats in addition to providing an extra leg space. This aircraft is 14% more fuel efficient than its closest peer in the single-aisle aircraft market.

Currently Boeing manufactures 52, 737 airplanes per month and has plans to expand production volumes to 57 on a monthly basis in 2019. The total backlog of the 737 series is 4,654 airplanes as of Sep 30, 2018. The same is expected to further increase, thanks to the recently clinched contract.

Commercial Jet Outlook in Africa

According to the company’s view, Africa’s long-term economic growth potential remains strong. The country is projected to require nearly 1,630 new airplanes in the 2018-2037 time period, presenting a market value worth $170 billion. Boeing is predicted to deliver a total of 1,190 aircraft by 2037 to Africa, which in turn should enable the company to capture valuable shares of the significant commercial jet market in this nation. The latest deal with Green Africa Airways will enable the company to duly achieve its delivery forecast for Africa.  

Price Movement

In the past 12 months, Boeing has returned 3.2% versus its industry’s decline of 11.5%.

Zacks Rank & Other Key Picks

Boeing currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks from the sector include Lockheed Martin Corporation (LMT - Free Report) , Engility Holdings, Inc. and Raytheon Company (RTN - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lockheed Martin delivered average positive surprise of 13.92% in the last four reported quarters. The Zacks Consensus Estimate for 2018 earnings has moved 2.9% north in the past 90 days to $17.51.

Engility Holdings delivered average positive surprise of 19.98% in the last four reported quarters. The Zacks Consensus Estimate for 2018 earnings has moved 4% north in the past 90 days to $2.10.

Raytheon came up with average beat of 6.71% in the last four reported quarters. The Zacks Consensus Estimate for 2018 bottom line has been inched 1.8% up in the past 90 days to $10.10.

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