Al Root

Boeing released its 2025 Commercial Market Outlook on Sunday, ahead of the Paris Airshow.

Demand isn't a problem as far as the eye can see. That's good news for many aerospace stocks. Now, Boeing, Airbus, and the rest of the commercial aerospace industry just need to build the planes.

Boeing updates its view of the market regularly, and the current outlook runs for 20 years, from 2025 to 2044. The jet maker expects about 43,600 jets to be delivered, including 33,285 single-aisle jets -- the 737 -- and 7,815 twin-aisle jets -- the 787. China, North America, and what Boeing calls Eurasia are expected to take roughly 9,000 jets each over that span.

Demand growth comes from more people on planes. Air travel demand has grown at an average annual rate of approximately 5% since 1990. That trend is expected to continue. And by 2044, the global fleet of single and twin-aisle jets is expected to roughly double to 44,000 planes from about 22,400 at the end of 2024. (Many jets also get retired over the coming 20 years, too.)

The 43,600 delivery figure in the 2025 outlook compares to the 43,975 projected in the 2024 commercial market outlook. That figure included 33,380 single-aisle jets and 8,065 twin-aisle jets.

The totals are down roughly 1% year over year, but that isn't significant. The 2025 outlook translates to more than 2,000 jets a year. Boeing and Airbus are expected to deliver about 1,400 jets this year. Their best year of combined deliveries ever was just over 1,600 jets in 2018.

One of the big challenges will be ramping up production -- but investors like it when they don't have to worry about demand. It's a reason shares of engine maker GE Aerospace fetch about 42 times estimated 2025 earnings, while the S&P 500 trades for closer to 23 times.

GE engine peers Rolls-Royce and RTX also benefit from the solid outlook. Their share trade for about 37 times and 24 times, respectively. Both Rolls and RTX have larger noncommercial aerospace businesses than GE.

Beyond engine suppliers, several parts suppliers also benefit from the rising demand. Wall Street likes TransDigm and Howmet Aerospace, with 73% and 74% of analysts covering the stocks rating shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.

TransDigm trades for about 49 times estimated 2025 earnings, while and Howmet trades for 38 times.

Boeing and Airbus, of course, both benefit from the demand for more planes. It gives Boeing, which is still recovering from 737 MAX problem and hasn't produced a full-year profit since 2018, time to recover.

A lot of commercial aerospace stocks are popular on the Street. A big reason is the outlook.

Write to Al Root at allen.root@dowjones.com

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June 16, 2025 09:26 ET (13:26 GMT)

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