Will Korean Air and Air China Cargo’s A350 Freighter Deals Shift Airbus' (ENXTPA:AIR) Long-Term Growth Story?

• In the past week, Korean Air converted seven Airbus A350-1000 passenger aircraft orders to the new A350 freighter, while Air China Cargo announced plans to acquire up to 10 A350 freighters, expanding Airbus's market leadership in next-generation cargo aircraft.
• These major commercial wins coincided with Airbus reporting strong third-quarter earnings, highlighting a resilient order backlog and renewed momentum in the cargo and freighter market segment.
• We’ll now explore how Korean Air’s endorsement of the A350F may reshape Airbus’s long-term growth and margin assumptions in its investment narrative.

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Airbus Investment Narrative Recap

For shareholders, the core investment story in Airbus centers on sustained global demand for fuel-efficient, lower-emission aircraft and the company's ability to convert its large backlog into profitable growth. Recent wins in the freighter market, including orders from Korean Air and Air China Cargo, reinforce Airbus's competitive position in next-generation cargo, supporting revenue visibility. However, these developments do not materially offset the biggest near-term risk: ongoing supply chain vulnerabilities, especially with engine and component suppliers, which continue to constrain production rates and delivery targets.

Among the latest announcements, Airbus’s robust third-quarter earnings stand out, with a year-over-year net income increase to €1,116 million and sales up to €17,826 million. This earnings performance underscores strong demand and an expanding backlog, further supported by recent commercial wins, but ongoing supply chain disruptions remain a key factor that could affect the timing and profitability of new aircraft deliveries.

In contrast, investors should be aware of continued supply chain risks that threaten production targets and could pressure free cash flow if unresolved...

Read the full narrative on Airbus (it's free!)

Airbus' narrative projects €98.7 billion revenue and €7.9 billion earnings by 2028. This requires 12.1% yearly revenue growth and a €3.0 billion earnings increase from €4.9 billion currently.

Uncover how Airbus' forecasts yield a €221.65 fair value, a 4% upside to its current price.

Exploring Other Perspectives

Fair value estimates from 21 Simply Wall St Community members range widely from €169.06 to €432.27 per share. While many are optimistic about long-term demand, continued supply chain issues could affect Airbus’s ability to deliver and capitalize on its order book, so consider the full spectrum of opinions when evaluating the outlook.

Explore 21 other fair value estimates on Airbus - why the stock might be worth over 2x more than the current price!

Build Your Own Airbus Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Airbus research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Airbus research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Airbus' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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