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Investing.com - Bernstein analyst Adrien Rabier upgraded Safran SA (EPA:SAF) stock rating from Market Perform to Outperform on Thursday, while raising the price target to EUR370.00 from EUR320.00. The stock, which has gained nearly 54% year-to-date, is currently trading near its 52-week high. According to InvestingPro analysis, the company appears fairly valued at current levels.
The upgrade is based on a bottom-up analysis suggesting significant upside to Safran’s guidance, particularly in the aftermarket segment. Bernstein believes aftermarket strength will continue due to limited supply of new planes and global traffic growth. This optimism is supported by Safran’s impressive financial health, with InvestingPro data showing a perfect Piotroski Score of 9 and robust gross profit margins of 49%.
The research firm constructed a detailed model for CFM56, Safran’s largest program, concluding that maintenance demand should exceed current expectations. While capacity constraints may create short-term bottlenecks, excess demand is expected to shift to later years, maintaining elevated shop visits and aftermarket sales through 2030.
Bernstein’s analysis indicates Safran and partner GE’s medium-term targets are "overly conservative" and will likely require upward revisions. The firm projects 9% higher engine profits than consensus estimates for 2028.
The research note suggests shop visits could be 35% higher than Safran’s forecast by 2030, with increased shop visits translating to faster growth in services and spare parts, which represent Safran’s most profitable business segments.
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