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On Tuesday, RBC Capital Markets adjusted its financial outlook for Safran SA (OTC:SAFRY) (SAF:FP) (OTC: SAFRF), increasing the price target for the aerospace company’s shares from €275.00 to €285.00. The firm’s analyst, Ken Herbert, reaffirmed the Outperform rating on the stock. This revision reflects a growing confidence in Safran (EPA:SAF)’s prospects, particularly regarding its performance and services forecast for the year 2025.
Safran reported robust financial results for the second half of 2024, marking a significant 16.5% rise in total sales and an adjusted EBIT (earnings before interest and taxes) margin of 15%. These figures were well-received by investors, especially after the initial guidance provided at the 2024 Capital Markets Day, which was deemed conservative. The subsequent slight increase in the forecast for 2025 was seen as a positive development.
Herbert commented on the improved outlook, noting the constructive commentary on the 2025 margins. Additionally, the projection for spare parts sales, expected to grow at a high single-digit rate or more, was highlighted as a positive sign. The analyst’s confidence in Safran is further bolstered by the potential of the CFM56 aftermarket business to drive additional growth.
The analyst also pointed to the opportunities for capital allocation as a factor that could continue to influence investor sentiment favorably. With the updated price target and maintained Outperform rating, RBC Capital Markets signals its belief that Safran’s stock has the potential for further gains.
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