THALES : Oddo BHF confirms its recommendation on the stock
March 05, 2024 at 06:21 am EST
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Oddo BHF maintains its 'neutral' rating on Thales shares, with an unchanged target price of 146 euros.
The armaments specialist reported EBIT of €2,132m for 2023, with sales up 7.9% on a like-for-like basis to €18,428m (+8.8% in Q4).
"FCF impresses once again at €2,026m, i.e. a cash conversion rate of 115%", notes the analyst.
In addition, Thales ended 2023 with order intake of 23,132 ME, driven mainly by mature countries, with 12 contracts worth over 100 ME signed in Q4 alone.
Visibility is therefore particularly good, with an order backlog of 45.3 bn euros, equivalent to around 29.5 months' sales", emphasizes Oddo BHF
Forecasts for fiscal 2024 are broadly in line with expectations, with sales of between 19.7 bn euros and 20.1 bn euros (Css: 19,958 ME) and an EBIT margin of between 11.7% and 12% (Cons: 12%).
Finally, Thales has announced an adaptation plan at TAS (its space business) concerning 1,300 positions, including 1,000 in France, which will be redeployed within the Group, without forced redundancy.
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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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