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On Friday, Jefferies analysts adjusted their stance on Airbus SE (AIR:FP) (OTC: OTC:EADSY), downgrading the aerospace giant’s stock from Buy to Hold. Accompanying this rating change, the firm also revised its price target downward from €190.00 to €180.00. The revision follows Airbus’s recent fourth-quarter performance, which, despite being solid, presented new challenges that could affect investor sentiment in the upcoming quarters. The company, currently valued at $136 billion, has seen its stock rise nearly 12% over the past six months, trading at a relatively high P/E ratio of 39.9x.
The analysts cited concerns over the potential difficulties Airbus may face with production ramp-ups and the integration of its aerostructures business. Additionally, the absence of a share buyback program was noted as a factor that might provide less support for Airbus stock in the near future. These considerations have prompted Jefferies to reassess their outlook on the company, leading to the lowered rating and price target. According to InvestingPro data, the company maintains moderate debt levels with a debt-to-equity ratio of 0.69 and has demonstrated steady revenue growth of 6.64% over the last twelve months.
In their commentary, the Jefferies analysts highlighted the slower expected earnings before interest and taxes (EBIT) growth in Airbus’s Commercial division. They also pointed to a weaker starting point for the Defence and Space (D&S) segment, which incurred a new charge in the fourth quarter. This charge, although not specified in detail, is anticipated to weigh on the financial performance of the D&S division.
The downgrade reflects a more cautious view of Airbus’s near-term prospects, with Jefferies analysts indicating a willingness to reevaluate their position once the momentum surrounding the A320 aircraft program becomes more favorable. Until then, the revised price target of €180 takes into account the anticipated slower EBIT ramp and the challenges facing the D&S segment, tempering expectations for the stock’s performance.
The changes in Jefferies’s outlook for Airbus stock are based on the latest available financial data and market conditions, and they are intended to guide investors as they consider their positions in the company. The new rating and price target are now part of the broader market analysis of Airbus’s potential trajectory in the aerospace sector, where it maintains its position as a prominent player with an EBITDA of $6.9 billion in the last twelve months.
In other recent news, Airbus has attracted attention with several noteworthy developments. Vertical Research Partners significantly raised its price target for Airbus shares from €17 to €189, maintaining a Buy rating. This adjustment is based on Airbus’s ambitious delivery goals and the strong demand for its A320 program, despite concerns over reliance on Spirit AeroSystems (NYSE:SPR), which is being acquired by Boeing (NYSE:BA). Similarly, RBC Capital Markets increased its price target for Airbus to €185, citing robust December deliveries and a positive outlook for 2025, with an estimated 825 aircraft deliveries. Bernstein also reaffirmed its Outperform rating with a price target of €180, focusing on Airbus’s delivery guidance and margin outlook for 2025.
Additionally, Airbus is in discussions with Riyadh Air for a potential order of up to 50 widebody aircraft, as the airline seeks to expand its fleet. This potential order includes the Airbus 350-1000 model, highlighting the competitive landscape in the aerospace industry. In another development, Airbus is exploring potential alliances in the satellite industry with Leonardo and Thales (EPA:TCFP) to enhance Europe’s competitive position globally. These recent updates underscore Airbus’s strategic moves in both its core aerospace business and emerging sectors.
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