European A&D Radar: Weekly sector news, positioning data and research insights

研报英文原文证据摘录

European A&D Radar: Weekly sector news, positioning data and research insights

Goldman Sachs European A&D Radar

Our view

See our Q2 earnings preview here.

Aerospace

Airbus’ Business Update was the most significant aerospace event of the week. The

company introduced a new €12–13bn adjusted EBIT target for 2029, announced a €5bn

share buyback over three years and reiterated its c.1x five-year cash-conversion target.

Our conversations with investors suggested a fairly consistent view that management

struck a sensible balance between confidence in the outlook and realism around the

execution challenge. Investor feedback was broadly positive, with the shares up c.7% the

following day, and attention has now shifted to the next potential catalysts. We expect a

strong Q2, after which an improving monthly delivery cadence should be key to building

confidence in the outlook.

Airbus’ strong share price performance came against a macro backdrop that was less

supportive, with oil prices rising and the US introducing new tariffs during the week. Civil

aerospace stocks have historically tended to underperform when oil prices rise, even if

the direct implications for original equipment demand are less clear.

Farnborough provided a similarly constructive read-across (note here). Our

conversations with companies across the sector suggested that both OE and

aftermarket demand remain healthy, and we came away incrementally more reassured

on aftermarket resilience despite higher oil prices. CFM also signed an MoU with IndiGo

covering more than 1,000 LEAP-1A engines, the largest prospective LEAP order to date,

alongside support for IndiGo’s MRO facility and a long-term materials-services

agreement covering spare parts.

A busy week of results ahead.