Giant aircraft maker Boeing (BA) - Get Boeing Company Report announced Tuesday that UPS (UPS) - Get United Parcel Service, Inc. Class B Report is buying 19 of its 767 freighters for an undisclosed amount.
"The Boeing 767 is the most versatile aircraft we operate," said UPS U.S. Operations President Nando Cesarone. "Our plan is to purchase 19 aircraft and take delivery between 2023 and 2025.”
As for Boeing, “the deal adds to a record-breaking year for Boeing freighter sales, including 80 firm orders for new widebody freighters and more than 80 orders for Boeing-converted freighters,” it said.
“In 2021 air cargo demand has surged due to an expansion of e-commerce and express cargo markets.” Boeing forecasts an annual increase of 4% in air cargo demand over the next 20 years.
Last week, Boeing said it delivered 34 new planes globally in November, up from only seven planes in November 2020. The latest number places Boeing on course to more than double deliveries from last year.
It has delivered 302 aircraft year-to-date, already well above the 157 total for all of 2020, when the Covid pandemic raged. Boeing delivered 380 jets in the pre-pandemic year of 2019.
Morningstar analyst Burkett Huey puts fair value at $249 and assigns Boeing a wide moat.
He reduced the target from $260 in October “to reflect a slower ramp-up in 737 MAX production and deliveries … and an extension of the near-term 787 headwind,” he wrote.
Boeing recently traded up about 4%, but that still leaves it down 17% over the past six months.