Deutsche Bank | Christophe Menard: Airbus (AIR) is on track to meet its delivery targets for fiscal year 2025, with preliminary September figures reflecting the strong performance in 2018, indicating a recovery in deliveries of the A320 family.
At the same time, efforts continue to consolidate European space activities into a joint venture involving Airbus, Leonardo and Thales. This initiative aims to create a European leader, improve profitability and reduce fragmentation in the sector. A binding agreement could be signed shortly.
Although Airbus’ exposure to currency risk is relatively well hedged until 2028, the future weakness of the US dollar poses a risk. Valuation adjustments, including a revision of the exchange rate and improved medium-term free cash flow assumptions, have led to an increase in the target price to €209 (from €186), which also reflects improved multiples thanks to the revaluation of the aerospace and defence sector. It remains a Buy.
