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Investing.com -- Shares of Safran SA (EPA:SAF) rose after the company posted its fiscal year 2024 results, which were in line with expectations, and raised its guidance for 2025.
Revenue for FY24 came in at €27.3 billion, slightly ahead of forecasts, driven by strong propulsion sales.
Adjusted EBIT stood at €4.1 billion, maintaining a 15.1% margin. Free cash flow exceeded expectations by 6%, reaching €3.2 billion.
The aerospace company raised its 2025 guidance, forecasting adjusted EBIT between €4.8 billion and €4.9 billion and free cash flow between €3.0 billion and €3.2 billion. The revision is mainly attributed to a higher outlook for spare parts sales.
Morgan Stanley (NYSE:MS) analysts noted that while the timing of the guidance upgrade was earlier than expected, it reinforces the company's positive aftermarket outlook.
The analysts flagged that Safran’s stock had already gained 16% year-to-date, outperforming other European aerospace aftermarket stocks.
“While we had expected FY24 release to be mostly a non-even as Safran had just issued its full year 2025 outlook ten weeks earlier, the timing of guidance raised (+2% on EBIT/ +7% on FCF) surprised us as we were not expecting it before H1 25 release in July,” said analysts at Barclays (LON:BARC) in a note.
Despite the early pricing in of improvements, Morgan Stanley suggested that the stronger forecast could further support the stock's performance.
“We believe that supply chain productivity is the key gating factor for the 2025 outlook. We view the overall increase in guidance as a positive for sentiment on the stock," said analysts at RBC Capital Markets in a note.
"Coming out of the CMD in Dec, we viewed the outlook as very conservative, and although still conservative in our view, provides some incremental upside to 2025 numbers,” RBC added.