THALES : Morgan Stanley initiates overweight coverage
June 13, 2023 at 07:40 am EDT
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In a note on European aerospace and defense stocks, Morgan Stanley initiates coverage of Thales with an 'overweight' recommendation and a price target of 169 euros.
The broker claims that the French group, as well as its British peer BAE Systems, also recommended 'overweight', have 2025 earnings forecasts that are 3-4% above consensus.
More importantly, our longer-term growth projections (2025-30) significantly exceed consensus (6% for both BAE and Thales, versus 3% and 4% consensus, respectively)', he adds.
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Thales is one of the European leaders in manufacturing and marketing of electronic equipment and systems for the defense and security, aerospace, and transportation sectors. Net sales break down by product group as follows:
- defense and security systems (53.4%): 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 (28.4%): avionics equipment (cockpit, cabin multimedia, and simulation equipment), space systems (satellites, payloads, etc.);
- digital identification and security solutions (18.2%).
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 (29.5%), the United Kingdom (6.6%), Europe (24.8%), the United States and Canada (14%), Asia (9.4%), Near and Middle East (6%), Australia and New Zealand (4.4%) and other (5.3%).
THALES 
