Airbus (AO) | Buy | Saying what it does, doing what it says.

研报英文原文证据摘录

Airbus (AO) | Buy | Saying what it does, doing what it says.

Airbus Buy | Target Price: EUR212.00

Indeed, wide-body demand is strong, but production is still low as the group is reintegrating Spirit work packages, must deal with

supply issues in interiors and launching its A350 freighter range. Wide Body profit (currently slightly above break-even) is

expected to rebound from a level slightly above break-even after Covid, but won't reach its full profitability potential before the

next decade, with A350 EBIT/unit contribution having the potential to be higher than A320 eventually. Similarly, the group is

investing in its Services operations and sees room for a doubling of revenues towards the USD 10bn mark and margin progression

towards double-digit levels from growing data services. The group uses its hedge book as a guide for its dollar assumption of

1.22, leaving some upside on that front should the dollar stay at the current spot rate. As for the cost optimisation, the group

estimates that it spent an extra EUR 1bn to prepare the ramp-up, some of which has already been reduced. Similarly, inflation

escalation clauses are broadly unchanged and continue to be based on wage inflation indexations and inflation targets consistent

with the Fed's and ECB's views.

As for the divisions, the group is optimistic that the current military demand backdrop and transformation of the portfolio will lift

operating profits to EUR 2.5bn, including EUR 1.2bn for Helicopters (bang in line with our expectations) and EUR 1.3bn for

Defence & Space (a touch more conservative than the EUR 1.5 bn EBIT implied by our model).

With FCF conversion expected of net profit is to average 1x over the period (once again in line with our expectations) and as a sign