On Thursday, Citi analysts increased their price target for Safran SA (OTC:SAFRY) (SAF:FP) (OTC: SAFRF) shares to €260.00, up from €230.00, while keeping a Buy rating on the stock. The adjustment reflects a positive outlook on the company’s financial performance, particularly in terms of earnings growth.
Citi’s analysts are confident in Safran (EPA:SAF)’s ability to achieve a 14% compound annual growth rate (CAGR) in EBIT over the mid-term. The optimism is largely due to Safran’s strong presence in the narrowbody aircraft aftermarket sector. Citi’s analysis indicates that Safran’s new revenue guidance for its Propulsion segment, which anticipates mid to high single-digit growth from 2024 to 2028, might be understated.
The potential for Safran’s guidance to be exceeded stems from anticipated increases in shop visit volumes and the extent of work required per visit. This is especially relevant for the LEAP engine, a key product for the company. Citi’s projections are roughly 10% higher than the consensus for Safran’s mid-term EBIT.
These forecasts align with insights from other industry players, including Lufthansa Technik and GE Aerospace, who have provided commentary on market conditions. The analysts at Citi believe that the combination of higher shop visit volumes and greater workscope per visit will drive Safran’s growth beyond its own guidance.
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