Safran: Good time to expect the trend to continue

Real time Euronext Paris			5 day change	Change on January 1st
206.20 ^EUR	+0.68%		+1.33%	+29.31%

Entrance fee	Goal	Stop loss	potential
€206.1	230€	195€	+11.6%

The timing seems good to be long on Safran shares as we expect the underlying trend to accelerate further.

Summary

● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

● The company has an interesting fundamental situation from a short-term investment perspective.

● According to Refinitiv, the company’s ESG score is good for its industry.

Strengthen

● Its core business has significant growth potential and sales are expected to increase according to Standard & Poor’s forecast. In fact, this could rise by 49% by 2026.

● The company is in a robust financial position given its net cash position and margin position.

● Over the past year, analysts covering the stock have significantly increased their EPS expectations.

● The opinion of analysts covering the stock has improved over the last four months.

● The divergence of price targets between the various analysts forming the consensus is relatively small, suggesting a consensus method of evaluating the company and its prospects.

Weaken

● The company’s current expected earnings per share (EPS) growth over the next few years is a notable weakness.

● With a 2024 P/E ratio of 28.9 times estimated earnings, the company has a fairly high earnings multiple level.

● The company’s valuation appears relatively high in relation to the value of its tangible assets.

● The company is highly valued given the cash flows generated by its operations.

● The company is not particularly generous with shareholder compensation.

● Over the last twelve months, analyst opinions have been revised negatively.

● The company’s earnings announcements typically do not meet expectations.

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Length of time

Period

SAF: Dynamic Diagram

Safran is an international high-technology group and a leading equipment provider in the aerospace and defense markets. The group specializes in the development, manufacture and marketing of devices and systems for high-tech mechanical and electronic devices. Net sales break down by product family as follows: – Aerospace propulsion systems (51.2%): helicopter engines (No. 1 in the world), engines for civil and military aircraft, systems for Space Lancers and missiles, turboreactors for drone targets, etc. ; – Aircraft equipment, defense systems and aviation systems (38%): aircraft engines, landing gear, braking systems, electrical wiring systems, etc. Safran also offers on-board systems and equipment for aircraft (mainly emergency slides, emergency fall arrest systems, protective parachutes, etc.). oxygen systems, electrical energy 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 in the world), inertial systems, optronic systems, tactical drone systems, etc.); – Aircraft interiors (10.7%): cabin interiors and seats; – Other (0.1%). Net sales break down geographically as follows: France (19.4%), Europe (24%), America (34.8%), Asia and Oceania (13.2%), Africa and the Middle East (8.6%) ).

More about the company

Sell

Buy

Last closing price

204.80EUR

Average target price

224.53EUR

Spread / average target

+9.63%

consensus

The timing seems good to be long on Safran shares as we expect the underlying trend to accelerate further.

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