Airbus: gain of around 11% before the recovery plan

  •   08/06/2020 - 11h35
  •   DEHOUI Lionel

From Monday to Friday, companies in the air transport or aeronautics sectors made the headlines. Print and other media outlets were interested in groups such as Lufthansa and Airbus. Several news items came from these two companies throughout the week and prompted some changes in the financial markets. The gain of about 11% achieved by Airbus puts an end to this series of news.

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Airbus: gain of around 11% before the recovery plan
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Oddo's analysis in brief

Indeed, the Airbus share price rose by about 11% while the government was about to present a recovery plan. A plan that will be aimed at the entire aeronautics sector throughout France. This recovery plan has already prompted the analysis of companies specialising in financial analysis. This is the case of the Oddo analysis office, which has given its opinion on certain important devices. It distinguishes two devices whose role it has specified.

First of all, he points out that the very first scheme is intended to stimulate the various companies in the airline sector to make replacements. But the analyst Oddo underlines that it will be a question of replacing the apparatuses (planes) having more than 20 years of existence. According to the analysis office, the second measure would concern the setting up of an aid fund which will be intended for ETIs and SMEs. Oddo also gave details of other components contained in the plan.

 

Extension of the unemployment system

One of the aspects taken into account would include provisions favourable to the safeguarding of certain jobs. It could therefore be an extension of the short-time working system currently in force in France. This may remain in place until the end of 2020. The office says that several budgets would be devoted as an allocation to research (upstream). They will be systematically accompanied by environmental colouring. Analyst Oddo did not limit himself to this point.

 

Course Objective and Current Course

Indeed, Oddo was quick to reiterate his buying advice regarding the value as well as his price target. It should be noted that the latter is valued at more than E74 and is based on certain assumptions deemed prudent. They concern in particular the speed of the FCF, but also the growth of air traffic in the medium term. This growth would be 2% per year according to Oddo.

On the other hand, Oddo added an important fact after looking closely at the current course. He finds on this point that the classification and the quality of the products of the giant French group Airbus are not reflected in the current course. On the other hand, there is another phenomenon that attracts attention from the French group. It is its impressive weekly progression.

 

Fulguriant progression

For the past 10 years, the power of the "sector rotation" observed at Airbus has never been seen before. The share price soared by a further +12% to nearly 81E. This indicates an interstellar progression of +43% over the whole week. It thus outperforms its resistance (75.5E), its highest level since mid-June 2017. It also surpasses the former low of 80E posted at the end of December in 2018.