Investing.com - Airbus (EPA:AIR) may be close to "turning a corner" on its recent supply chain issues, which should support the company's performance going forward, according to analysts at Morgan Stanley (NYSE:MS).
In a note to clients, the analysts noted that while they do not expect 2025 to be the "great unlock" of Airbus' plans to ramp up production, they expect to see enough progress "to build greater conviction" in their medium-term forecasts for the European aerospace giant.
"On that basis, the shares look attractive, with progressive risk retirement key to driving the shares higher," the analysts wrote. They named Airbus as a new "top pick" in the aerospace sector and raised their price target for the stock to 200 euros from 160 euros.
Paris-listed shares in Airbus, which have risen by more than 6% in the past one-year period, were trading higher in early afternoon dealmaking on Thursday.
The analysts' comments come after Airbus CEO Guillaume Faury told reporters on Wednesday that he was confident the firm would reach its goal of manufacturing 75 single-aisle aircraft per month in 2027 thanks in part to a focus on a plan to overcome potential issues at its suppliers.
Airbus delivered 766 planes in 2024, just shy of its guidance, as the company grappled with shortages in labor and parts that have weighed on global supply chains. Planemakers have been struggling to find experienced workers who departed during the pandemic, while geopolitical tensions have hit supplies of raw materials.
However, analysts quoted by Reuters said the miss involved four small A220 jets, meaning that deliveries of Airbus' more popular larger planes mostly met estimates. Deliveries often generate the most amount of revenue for jetmakers, making the number a key industry metric.
In July, Airbus slashed its annual delivery target to "around 770", down from 800, with Faury flagging that he had been surprised by a downturn in supplies from key engine manufacturer CFM. Although the issues at CFM impacted deliveries in 2024 and are seen denting the figure this year, Faury said it would remain a short-term problem.
"While supply chain issues continue, we are seeing green shoots of improvement that we think should support better execution," the Morgan Stanley analysts said.
(Reuters contributed reporting.)