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Bank of America has added global aerospace giant Airbus to its “top 10 best ideas” list for the second quarter of 2023, describing it as a “structural winner.” The bank said it likes the company for several reasons, including improvements in the supply of airplane parts, increased demand for large planes, and the post-pandemic reopening of China. On that basis, BofA analysts expect shares of Airbus to rise by 60% to 200 euros per share ($217) over the next 12 months. The aerospace giant’s Paris-listed shares were trading at 125 euros at midday on Monday. AIR-FR 1Y mountain The analysts said they had increased confidence in Airbus’s plan to meet its previously announced growth targets ahead of the Paris airshow later this year — a key catalyst moment for the stock. The France-headquartered company announced plans in late 2022 to make 65 Airbus A320 single-aisle planes a month in 2023 and 2024, ramping up to 75 aircraft a month by the middle of the decade if there were no further complications in the global supply chain. Earlier this month, Guillaume Faury, Airbus’ CEO, said that global supply chains had proved challenging in 2022 and held back the company’s plans for growth. “The global supply chains are in a difficult place. 2022 has been really bad from that perspective”, Faury told CNBC’s ‘Squawk Box.’ “Yes, it’s getting slightly better, but very slowly.” The BofA analysts added that suppliers like Rolls-Royce and General Electric were also working to support Airbus’s increased production rates. There is also growing demand for large airplanes, known as widebodies, according to the bank, which is good news for Airbus. “With the recovery in full swing, we could see further widebody and narrowbody order announcements at the show,” the analysts led by Benjamin Heelan said in a note to clients on April 3. BofA also added that Boeing , Airbus’s main competitor, has not announced any plans to introduce new planes this decade, which is good news for Airbus. The reduced competition should help Airbus increase free cash flow and provide better returns for shareholders over the next five years, it added .
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