As the year has gotten off to a horrible start for U.S. airplane maker, Boeing (NYSE:BA), there are a few stocks to buy and sell related to Boeing that investors may want to consider. In January, an emergency exit door fell off of one of Boeing’s new 737 Max planes right after take off. The plane, being used by Alaska Air (NYSE:ALK), was carrying passengers at the time, though nobody was badly injured. The U.S. National Transportation Safety Board reported that four bolts on the door were not the proper size. The FAA further concluded that the firm had not acted in compliance with manufacturing requirements for its 737 Max. Earlier this month, the Department of Justice began a criminal investigation of the firm. Additionally, a number of airlines have criticized Boeing following these events. This is only five years after the firm entered crisis mode, following the destruction of two 737 Max planes due to flawed flight control software in flight. Here are three stocks to buy and sell related to Boeing.
Embraer (ERJ)
The third largest plane maker in the world, Embraer (NYSE:ERJ) is well-positioned to benefit from Boeing’s problems.
Specifically, as airlines look to avoid Boeing’s quality-control issues, many are likely to buy Embraer’s jets. Boeing’s largest competitor, Airbus (OTCMKTS:EADSY), has had its own supply-chain issues. This limits the extent to which it can be boosted from its rivals’ struggles, at least in the near-to-medium term.
Embraer recently made a huge deal, worth more than $7 billion, with American Airlines (NYSE:AAL). Under the agreement, the airline will buy 90 to 143 of Embraer’s large regional jets.
Morgan Stanley also recently reported that ERJ will soon be fruitful, as it breaks into the duopoly previously held by Boeing and Airbus. The bank hiked its price target on the name to $40 from $19.50.
Airbus (EADSY)
Europe’s Airbus has supply chain issues that prevent the firm from benefiting from Boeing’s issues in the short term. Still, Airbus has been able to ramp up production faster than Boeing. Lack of consumer confidence in Boeing will favor Airbus to win many orders in the long term.
Last month, Airbus confirmed that it is looking to exploit Boeing’s problems. The company expects to deliver 800 planes this year, compared with 735 in 2023.
Moreover, even before the 737 Max’s door fell off in January, Airbus was already ascendant. According to research firm Senor, the European manufacturer’s market share came in at 61% last year, versus 30% eight years before that.
Additionally, two of Boeing’s Asia-based customers recently ordered 65 planes from Airbus.
Southwest (LUV)
Southwest (NYSE:LUV) relies entirely on Boeing’s 737 planes to conduct its business, and the airlines recently reported that it was having 46 737 Max planes delivered in 2024, versus its previous forecast of 79.
The airline has had to cut back on its planned flight schedule and on hiring as a result of Boeing’s issues. Moreover, the airline has withdrawn its 2024 financial guidance, CNBC noted.
Southwest is having to deal with higher fuel prices, as well as the ongoing issues with Boeing, thanks to higher oil costs.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.