THALES : Oddo BHF confirms its recommendation on the stock
July 07, 2023 at 04:16 am EDT
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Oddo BHF maintains its neutral rating on Thales shares, with an unchanged target price of 137 euros.
With Thales due to publish its Q1 results on July 21, Oddo BHF expects organic sales growth of 6.5% to ME 8633 (of which 9.2% in Q1 and 4.3% in Q2).
The broker believes that profitability should be preserved, and models EBIT at 989 ME, i.e. a margin of 11.5% (+66 bp).
For its part, Thales anticipates organic sales growth of between 4% and 7% and an EBIT margin of between 11.5% and 11.8%.
'All in all, we think Thales may just tighten its targets for fiscal 2023 towards the top end of existing ranges', concludes Oddo BHF.
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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%).
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