To The Moon

$Boeing(BA)$ and $GE Aerospace(GE)$ secured a $14.5 billion deal with Etihad Airways for 28 Boeing aircraft powered by GE engines. This agreement is part of a broader $200 billion U.S.-UAE trade deal announced by President Trump, highlighting the strengthening commercial ties between the two nations.

The deal between Etihad Airways, Boeing (BA), and GE Aerospace (GE) for 28 Boeing aircraft powered by GE engines can be seen as a positive indicator for the potential recovery and future prospects of both companies.

In this article, I would like to explore whether BA or GE is a better stock to buy into with the positive expectation of potential recovery and future prospects.

Reasons for Potential Recovery/Positive Impact

Increased Order Backlog: This $14.5 billion deal significantly boosts the order backlogs for both Boeing and GE Aerospace. A strong backlog provides revenue visibility and can lead to increased production and future earnings. For Boeing, it's a welcome win as it works to overcome past challenges and increase its delivery rates. For GE Aerospace, it secures future engine production and long-term service agreements.

Vote of Confidence: Such a large order from a major airline like Etihad signifies confidence in Boeing's aircraft and GE's engines. This can positively influence market sentiment and investor perception of both companies.

Long-Term Growth Potential: The deliveries are expected to start from 2028, indicating a long-term relationship and sustained revenue stream for both companies. This aligns with Etihad's plan to double its fleet by 2030, suggesting potential for further orders in the future.

Economic Benefits: The deal is projected to support 60,000 jobs in the U.S., highlighting the broader economic impact and potentially garnering political support.

Positive News Flow: This positive news can help to offset some of the negative sentiment surrounding Boeing due to past issues and production slowdowns. For GE Aerospace, it reinforces its position as a leading engine supplier.

Why GE Aerospace (GE) Over Boeing (BA) - Stock Price Valuation

GE Aerospace (GE) Analysis

As of time of this writing, Simply Wall Street considered GE Aerospace to be fairly valued with a fair value estimate of $213.62 per share. The stock was trading around $31.78 on 16 May 2025, suggesting it might be trading above their estimated fair value but still within a reasonable range. They assigned GE Aerospace a "Wide" economic moat rating and a "Medium" uncertainty rating.

If I took the buy point into consideration for GE, it looks like it had reached near its buy point, which could mean that this would be a good time to consider GE, I am expecting to see a slight pullback when market opens on Monday (19 May) because of reaction to the debt rating reduction announced over the weekend.

Overall, I think I would be considering to load GE more near around $215 to $220.

Considering that we have been seeing pretty good positive momentum from GE and the buy volume have been pretty consistent, there might be a chance of a upside movement after a small pullback on Monday (19 May).

Boeing (BA) Analysis

As of time of this writing, Simply Wall Street considered Boeing's stock to be undervalued, with a fair value estimate of $175.48 per share. The stock was trading around $205.82 on 16 May 2025, suggesting it was trading above their fair value but still within a reasonable range. They assigned Boeing a "Wide" economic moat rating but a "High" uncertainty rating.

For BA, we can see that the current price is above the buy point, and we might see a bigger pullback, if that happen, that could also give us an opportunity to load up some stocks, to prepare to take advantage of the Etihad Airways deal, in the long run, I think BA could recover, but there are still challenges and headwinds that could hit BA.

Though we are seeing positive strong momentum from BA, but the buy volume have not been very encouraging, though we saw buy volume picked up on last Friday (16 May), it is not strong enough to push for stronger investors sentiment.

Factors to Consider

Boeing's Specific Situation: While this deal is positive, Boeing still faces scrutiny regarding its production quality and regulatory oversight. Any negative news on these fronts could still impact the stock price.

GE Aerospace's Strengths: GE Aerospace has been performing strongly as a standalone entity. This deal further solidifies its growth prospects in the commercial aviation sector.

Broader Market Conditions: The overall health of the global economy and the stock market will still play a significant role in the performance of these stocks, regardless of this specific deal.

Competition: Both companies operate in competitive industries. Monitor their performance relative to their peers (e.g., Airbus for Boeing, other engine manufacturers for GE).

Risk Management: We as investors, should always use appropriate risk management techniques, such as setting stop-loss orders, to protect your capital.

Summary

The Etihad Airways deal is a significant positive development for both Boeing and GE Aerospace, suggesting potential for recovery and future growth. How we trade around it will depend on our individual investment strategy, risk tolerance, and time horizon.

I would be monitoring how GE and BA would move in response to the deal as well as the impact of the U.S. debt rating reduction.

Appreciate if you could share your thoughts in the comment section whether you think GE would provide a better opportunities to trade than BA in view of the Etihad Airways deal.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.