On Friday, Deutsche Bank reiterated its Buy rating on Airbus SE (AIR:FP) (OTC: OTC:EADSY), maintaining a price target of EUR186.00. The decision follows a report of 53 aircraft deliveries by Airbus in May, which represents a sequential and year-over-year decline. The A220 was the only platform not to see a decrease in volume compared to the previous year. The observed drop in deliveries is attributed to extended breaks during May, which likely interrupted delivery schedules.
The bank noted that while it's premature to draw definitive conclusions from the May data, the coming months will be critical for Airbus to reach its target of 800 deliveries for the year. Analysts at Deutsche Bank have slightly adjusted their forecast for the fiscal year 2024, now expecting 805 deliveries, a minor revision from the previous estimate of 807.
Airbus's delivery schedule for 2024 is anticipated to be weighted towards the end of the year, with an estimated 130-140 aircraft deliveries in December alone. This back-end loading of deliveries is a significant factor in the company's strategy to meet annual delivery goals.
The aircraft manufacturer's performance in the upcoming months will be closely watched as it strives to achieve its delivery targets amid the disruptions noted in May. The slight adjustment in the delivery estimate by Deutsche Bank reflects caution but does not significantly alter the bank's positive outlook on Airbus shares.
In other recent news, Qatar Airways is in talks with Airbus and Boeing (NYSE:BA) for a significant order of wide-body jets, including models such as the Airbus A350 and Boeing's 777X. The exact number and financial details of the potential deal remain undisclosed. Similarly, Airbus is facing parts and labor shortages that could delay the assembly of several dozen aircraft, potentially impacting its 2024 delivery targets.
Airbus has also been part of a diplomatic engagement, with French President Emmanuel Macron securing an exemption for the company from Canadian sanctions on Russian titanium. This exemption will allow Airbus to continue its production processes without disruption.
In other recent developments, Airbus CEO Christian Scherer expressed concern over the impact of Boeing's recent safety issues on the aviation industry, emphasizing the potential for undermining public confidence in air travel.
Meanwhile, Chinese President Xi Jinping visited Paris for discussions with French President Emmanuel Macron, where trade issues were a key topic. There is speculation that China may announce a purchase of around 50 Airbus aircraft.
InvestingPro Insights
In light of Airbus SE's recent performance and future expectations, key metrics from InvestingPro provide additional context for investors. With a robust market capitalization of $128.79 billion, Airbus holds a significant position in the aerospace industry. Despite a high P/E ratio of 30.16, reflecting investor confidence in future earnings, the company's P/E ratio adjusted for the last twelve months as of Q1 2024 is slightly higher at 30.96. Additionally, Airbus's revenue growth of 13.65% over the last twelve months indicates a strong upward trajectory in sales, an essential factor for reaching its ambitious delivery targets.
InvestingPro Tips highlight the company's financial prudence, with Airbus holding more cash than debt, which may provide flexibility in managing the delivery schedule fluctuations. Moreover, the company has consistently rewarded shareholders by raising its dividend for three consecutive years. On the other hand, two analysts have revised their earnings downwards for the upcoming period, which could be a point of consideration for potential investors. With these insights, investors can better assess the company's financial health and future prospects. For more detailed analysis and additional tips, visit InvestingPro and discover 7 more tips to inform your investment decisions. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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