On Monday, Berenberg raised its target price for Safran from €175 to €235, while renewing its buy recommendation on the stock.
In a research note, the research firm describes the 19.1% organic growth achieved by the aerospace equipment supplier over the first three months as "impressive".
However, it cannot help pointing out that the Group's costs have risen as a result, the dynamism of the business being necessarily associated with the related expenses in accordance with IFRS principles, an element which it nonetheless considers to augur well for the development of profit margins.
However, after the surge in the share price that preceded this publication, the analyst now sees more potential in stocks such as MTU, Honeywell and Montana Aerospace.
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Safran is a high technology international group, a leading equipment provider in the Aerospace and Defense markets. The group specializes in the design, manufacturing, and marketing of equipment and systems of high technology mechanical and electronic equipment. Net sales break down by product family as follows:
- aeronautic and space propulsion systems (51.2%): helicopter motors (No. 1 worldwide), civil and military airplanes motors, systems for space lancers and missiles, turboreactors for drone targets, etc.;
- aircraft equipment, defense systems and aerosystems (38%): airplane engine pods, landing gear, braking systems, electric wiring systems, etc. Safran also offers on board aircraft systems and equipment (primarily evacuation slides, emergency arresting systems, protective parachutes and oxygen systems, electrical power management systems, control systems, water and waste management systems and connectivity systems) and defense and security systems (helicopter flight controls, fingerprint-based biometric identification systems (No. 1 worldwide), inertial systems, optronic systems, tactical drone systems, etc.);
- aircraft interiors (10.7%): cabin interiors and seats;
- other (0.1%).
Net sales are distributed geographically as follows: France (19.4%), Europe (24%), the Americas (34.8%), Asia and Oceania (13.2%), Africa and the Middle East (8.6%).