Shares in Europe's largest aerospace-industrial conglomerate Airbus (AIR.FR) are trading down 12% today, as the company lowered its financial forecast for the full year 2024. It now expects lower pre-tax profits and fewer aircraft to add to its fleet this year. The company also indicated that the decision to lower expectations was influenced by higher costs in the space operations segment and problems in supply chains (particularly in the engine and cabin equipment sectors).
- The company expects EBIT to be around €5.5 billion this year, compared to the €6.5 to €7 billion estimated on April 25. Aircraft deliveries are expected to reach 770 models this year, against 800 expected; at the same time, Airbus has postponed the return of A320 production.
- Airbus relayed that costs for its space systems unit rose to €900 million in the first half of the year, as a result of higher service and labor costs. Airbus has already surprised the market once this year with a weaker-than-forecast report, and investors expect the problems with satisfactory profitability to continue. Half-year results will be released on July 30, 2024.
Airbus shares (AIR.FR)
Airbus shares are experiencing one of the biggest sell-offs in their history and are trading 10% below the 200-day simple moving average (SMA200, red line). The relative strength index (RSI) is trading at 20 points, signalling a deep oversold condition. Significant support can be found around EUR120 per share.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile app
Source: xStation5
Airbus valuation forecasts and multipliers
As a result of lower earnings, the price-to-earnings ratio for Airbus shares is rising, while ROIC or ROE ratios are falling, suggesting challenges in the business. Higher costs could eventually cause the WACC ratio to rise above ROIC, reducing economic value added (EVA).
Source: XTB Research, Bloomberg Finance L.P.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
