On Monday, BofA Securities adjusted its outlook on Airbus SE (AIR:FP) (OTC: OTC:EADSY), with analyst Benjamin Heelan increasing the price target from EUR 180.00 to EUR 187.00 while reiterating a Buy rating on the stock. The revision reflects an updated analysis following Airbus's announcement of its final delivery count for 2024, which stood at 766 aircraft, slightly below the guidance of 770.
With a market capitalization of $125.36 billion and trailing twelve-month revenue of $75.05 billion, Airbus remains a dominant force in the aerospace industry. InvestingPro analysis shows the company has maintained profitability over the last twelve months, with strong financial health indicators.
Heelan noted that the updated price target takes into account a higher mix of A321 deliveries and anticipates that Airbus will achieve an EBIT in line with the forecasted €5.5 billion, excluding a new charge on the Space division. The expected charge, based on client consensus during a recent U.S. trip, is around €200 million. Despite anticipating limited margin growth in FY25 due to increased hiring in the Commercial sector, R&D headwinds, and inflation, these factors are expected to be balanced by favorable foreign exchange rates and volume.
The analysis by BofA Securities predicts a conservative estimate of 810 deliveries for FY25, with potential for an increase given Airbus's history of outperforming its delivery targets by plus or minus 20 units. Management's comments during the announcement indicated confidence in returning to pre-COVID delivery levels in the foreseeable future. This outlook is supported by improvements in engine supply and the impending conclusion of a deal with Spirit.
The revised price objective of EUR 187.00 is based on the discounted 2026 free cash flow projected back to 2025. BofA Securities has included Airbus on its '25 for 2025' list, which highlights the firm's top investment ideas for the year.
In other recent news, Airbus narrowly missed its annual delivery target in 2024, delivering over 765 aircraft against the set target of around 770. This was due to supply chain issues that led to some deliveries being postponed. Meanwhile, Taiwan's China Airlines announced a nearly $12 billion fleet renewal deal, splitting the order between Boeing (NYSE:BA) and Airbus. The new aircraft are scheduled for delivery starting from 2024.
On another note, Qatar Airways is reportedly considering replacing the Boeing 737-10 model from its order list with the smaller 737-8s. This adjustment is due to a reassessment of fleet needs following the resolution of a legal dispute with Airbus SE.
In personnel news, renowned aerospace analyst Cai von Rumohr announced his retirement from TD Cowen after 55 years of service in the Aerospace and Defense industry. His coverage responsibilities will be taken over by Gautam Khanna and Jack Ayers.
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