Airbus halts plan to create super fighter jets in Europe

The European firm obtained a record profit in 2021 and will earn 50% more until 2024, the year in which revenues will exceed the record figure of 2019. On the stock market, the share has a potential of 40% rise, and the price/earnings ratio is 20 times. | All about the fund advised by elEconomista, Tressis Eco30 Portfolio.

Those who believe that more should be invested in defense have realized that Europe lacks hard power. René Obermann, Chairman of the Board of Directors of Airbus, told The echoes last year that “the FCAS is vital for Europe”, referring to the Air Combat System of the Future that France, Germany and Spain undertook to develop.

“We’re talking about building the next generation of fighter jets, but also about electronic warfare capabilitiespilotless vehicles and grouped drones, as well as the connectivity between all these elements”, highlighted the German.

It is about building the New Generation Fighteran aircraft whose prototype should be ready in 2025 and the first units delivered in 2040. But Éric Trappier, CEO of Dassault Systèmes (one of the assigned manufacturers), warned a few days ago that the project is not advancing and that Airbus has not signed the contract. Some media specialized in the military industry mention Germany’s suspicion: it is said that in Berlin the leadership that Dassault, manufacturer of the legendary Rafale, would have in the program would displease.

The question now is whether Germany will give the green light to this European system or whether it will choose to buy planes. F-35 to Lockheed Martin, as already rumoured. According to the French newspaper The gallery in mid-March, SCAF “is currently the only credible alternative to this invasive American hegemonyextremely dangerous for the strategic autonomy” of Europe.

Whatever happens, the Airbus accounts will not suffer much. Last year, the aeronautical consortium won 4,213 million euros, an unprecedented figure; and net profit is expected to grow 50% between 2021 and 2024, the latter year in which it would exceed 6,000 million, according to the consensus of analysts collected by FactSet. Precisely, we will have to wait for 2024 for the company to exceed the level of income it had in 2019: 70,478 million (a record figure).

“The United States has largely focused on a few fighter programs (with the F-35 as the main effort),” analysts say. Bloomberg George Ferguson and Douglas Rothacker – but “Europeans compete with each other, which reduces efficiency programs and leads to reduced capacities.

The investor who wants to have Airbus in his portfolio must know that the stock market potential of its share is 40%, since it is listed at 107 euros and the market consensus gives it a target price of 149 euros. The titles of the European firm have not yet exceeded 139 euros, the maximum prior to the pandemic that was registered on January 24, 2020.

Thus, for Airbus’ 2022 profits, multiples of 20.7 times at current prices (15.5 times in 2023); somewhat more expensive than Leonardo’s 7.7 times or Lockheed’s 16.7 times, but cheaper than Boeing’s 58 times.

For JP Morgan analysts, Airbus is one of their favorite stocks in European civil aviation, along with MTU and Safran.