AIRBUS: the stock rebounds again, an analyst in support

  •   06/08/2020 - 08h32
  •   DEHOUI Lionel

The manufacturer Airbus has been particularly active in the news from the past week to date. Indeed, last Thursday, the airline group and Madrid had agreed to limit staff reductions in Spain. At the beginning of this week, Guillaume Faury, the company's CEO, did not rule out the possibility of making dry layoffs. This will be in response to this context of health and economic crisis. Yesterday, Airbus was up 4% to 66E. An impulse of progression which the company did not leave this Wednesday. Indeed, the share continued with its rise on the Paris Stock Exchange by signing a gain of 3% this morning. Over the last three sessions as a whole, the stock has risen by around 9%. The group's dynamism leads the Credit Suisse analyst to reiterate his buy recommendation on the stock. Note: Credit Suisse accompanies this recommendation with a price target of 78E following a review with management. The analyst clearly expressed himself through a note.

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AIRBUS: the stock rebounds again, an analyst in support
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Some points of the Credit Suisse rating

It is essential to take note of the analysis made by Credit Suisse. Indeed, this famous analysis office has indicated that it considers that the aircraft manufacturer gives a better prospect of a rise. He makes this assertion by comparing him to many peers. However, the bureau pointed out that the rebound in earnings as well as the rebound in cash are not reflected in the share price at this time. He followed up his analysis with a pertinent observation.

Credit Suisse reports that it has noted that the tone of management remains cautiously optimistic despite the very difficult context. However, the situation has stabilised depending on the environment and 2022 could be a very special year. It could indeed become the start-up year of the key Airbus programme (A320). The broker also pointed to another challenge that the European aeronautics giant is aiming at.


Adjustments at the analysis office

According to the analyst firm, the company's other major challenge is to succeed in reducing fixed costs at the level of large aircraft. An issue that particularly concerns its A350 aircraft. The broker cited in his note the Airbus management statement that there will be no recovery before the 2023-25 fiscal year. On the other hand, Credit Suisse has promised in its memorandum that it will update its estimates on the basis of the results of the first half of the year.

As a result, the analyst has reduced (by -6%/-4%/-2%) his revenue over 2022e-2024e. At the same time, it slightly reduced the net loss in 2020e with less restructuring costs. On the other hand, it proceeded with the slight increase in profits in 2021st due to the defence and space sector.


Yesterday's stock performance according to analysts

It should be recalled that for the past six weeks, at the beginning of June, the title had been trapped in Corridor 62/69E. But it resumed +4% yesterday towards the 66E and the analysts estimated that it could climb until approaching the 72.3E, that is to say the ex-resistance of March 26. However, they specified that this will only happen if it exits from the top.