UBS confirms its 'buy' recommendation on Thales shares with a target price raised from €350 to €360, a new TP that represents 37% upside potential for the aerospace, transportation, defense, and security electronics group's stock.
We believe that the overall stabilization of civil activity could lead to an upward revision of forecasts, thanks to the potential for higher sales in defense in the third quarter, the broker summarizes.
Thales is one of the European leaders in manufacturing and marketing of electronic equipment and systems for the aerospace, defense and security sectors. Net sales break down by product group as follows:
- defense and security systems (55.3%): C4I defense and security systems (control and monitoring systems, communication, protection, cyber-security, and other systems), defense mission systems, naval systems, electronic war systems, drones, air operation systems (air defense, air surveillance), ground defense systems and missiles;
- aerospace systems (26.7%): avionics equipment (cockpit, cabin multimedia, and simulation equipment), space systems (satellites, payloads, etc.);
- digital identification and security solutions (17.4%);
- other (0.6%).
Besides, the group owns a 35% stake in Naval Group (manufacture of naval equipment for defense and nuclear energy sectors).
Net sales are distributed geographically as follows: France (27.7%), the United Kingdom (6.5%), Europe (28.1%), North America (12.4%), Asia (9.9%), Australia and New Zealand (4.1%) and other (11.3%).
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