THALES : Oddo BHF confirms its 'neutral' rating on the stock
July 24, 2023 at 04:41 am EDT
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Oddo BHF maintains its 'neutral' rating on Thales shares, with an unchanged target price of 137 euros.
After achieving an EBIT margin of 15.9% in the 1st half (+354 bp), Thales expects a 2023 margin at least in the upper range of the 13.5%/14.5% target, which implies a margin close to 13.6% in the 2nd half, reports the analyst.
For its part, Oddo BHF believes it is taking a cautious stance, anticipating a margin of 14.7% for fiscal 2023.
'Supply chain issues continue to penalize sales in the Space segment, making it difficult to achieve the target of sales of 2.5 billion euros in 2024, even if the company anticipates a reduction in chain tensions in the 2nd half of the year', justifies the broker.
Oddo BHF has finally revised its forecasts marginally, with a 1.3% drop in its 2023 EPS.
Furthermore, 'we anticipate adjusted FCF of 1,584 ME (including Indonesia advances) rising to 1,788 ME in 2024', concludes the analyst.
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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 
