Airbus (1K) | Hold | Macro & technical clearance still pending

Research evidence excerpt

Airbus (1K) | Hold | Macro & technical clearance still pending

o the risks of a further deterioration of global macro conditions if Net financial debt (m) -6,562 -10,214 -14,629

the Strait of Hormuz does not reopen soon. Global credit spreads have widened FCF (m) 4,499 6,279 7,517

by 40-60bp, which alone can explain a 10-15% drop in share prices, which has EPS adj. and ful. dil. 6.65 7.86 9.99

now fallen by 20%+ since we downgraded to a Hold at the end of October, also Consensus EPS 7.25 8.52 10.73

fairly reflecting the postponed gratification of a delayed ramp-up. Net dividend 3.33 3.93 5.00

FY to 31/12 12/26E 12/27E 12/28E Deconstructing the forecasts

P/E adj and ful. dil. 25.5 21.6 17.0

▪The risks of slower GTF engine supply are now baked in the group’s short and EV/EBITDA 11.4 9.8 7.9

midterm guidance, but still point to an acceleration of deliveries in the coming EV/EBIT 16.2 13.3 10.2

months and between 26-28E. Airbus is thus capable of meeting our midterm FCF yield 3.0% 4.4% 5.3%

profit assumptions (opex leverage) but exceeding them after 29E due to cost Dividend yield 2.0% 2.3% 2.9%

optimisation, pricing and product mix gains and Defence & Space optionality. ND(F+IFRS16)/EBITDA -0.5 -0.7 -0.9 Gearing -22.6% -31.3% -38.9%

Valuation and investment conclusion ROIC 17.5% 20.5% 25.8%

▪We believe Airbus will reach at least EUR 13bn EBIT by 2029E and accumulate EUR EV/IC 3.8 3.7 3.5

17bn cash (after dividends) above the EUR 10bn net cash it deems necessary to Sector Most Pref. Sector Least Pref.

retain at any given time. This is enough to justify an NPV of EUR186bn by then on Exail Technologies Hensoldt Indra Saab

a conservative cyclically adjusted EV/EBIT of 13x, which is discounted at a WACC Leonardo

of 9% points to EUR 196/share 12m forward TP. Rheinmetall

Safran