Jefferies raises price target for Airbus and Rolls-Royce due to positive outlook

From Investing.com: 2025-01-22 02:26:47

Jefferies analysts have revised assessments in the aerospace and defense sector, focusing on Airbus and Rolls-Royce. Airbus’ price target has been raised to €190, reflecting a 12% increase, while Rolls-Royce’s target has jumped 23% to 800p. Analysts anticipate a strong fourth quarter for both companies, driven by favorable factors.

Airbus’s improved outlook is attributed to currency exchange rates and strong commercial aircraft sales. Analysts foresee increased free cash flow and share buybacks, with adjusted EBIT projected to reach about €7 billion. Challenges in OE production ramp-up are acknowledged, but positive outcomes are expected with 810-820 aircraft deliveries.

Rolls-Royce is experiencing positive momentum due to currency exchange rates and improving market sentiment. Analysts predict the company will exceed its fiscal year guidance, with currency tailwinds expected to boost EBIT by £200 million by 2027. The possibility of surpassing market expectations in upcoming trading updates adds to the positive outlook.

Jefferies also highlighted potential volatility in the defense segment due to geopolitical uncertainties, emphasizing Continental Europe’s potential benefits from increased defense spending commitments. The brokerage remains cautious about defense names in the UK and US, citing ongoing reviews and budget uncertainties as reasons for concern.



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