Morgan Stanley| Management hosted a Business Update on Wednesday during the Paris Air Show, focusing on supply chains and production ramp-up. Specifically, Ross Law (analyst) estimates that during the event, the company has received orders for 846 aircraft, which according to the Airbus CEO, brings the total order backlog to 8,000 units, equivalent to 10 years of production at the current rate. With this, Ross highlights that the current strong demand environment is undeniable, supported by the recent recovery in air traffic (both domestic and international), and notes that if supply chains continue to normalise and volumes increase, it is difficult to ignore the good earnings (EPS +19% CAGR 2022-25) and cash generation (FCF +14% CAGR 2022-25) outlook, reinforcing his OW on the stock.
Supply normalisation bodes well for earnings and cash generation outlook for Airbus
