On Friday, Safran’s annual results were widely applauded by the markets: the stock soared by more than 8% at the closing bell. The group expressed confidence for 2026 and raised its targets through 2028, buoyed by strong momentum in air traffic and surging defense budgets.
Safran announced it is aiming for an average annual revenue growth of around 10% between 2024 and 2028, with current operating income expected to reach between 7 and 7.5 billion euros in 2028—one billion more than the target set for the end of 2024.
In this context, RBC has raised its price target to 400 EUR (vs 340 EUR previously) and maintains its Outperform rating, notably highlighting a free cash flow (FCF) of around 2.1 billion euros, which exceeds expectations.
RBC also emphasizes the upward revision of outlook for the CFM56 engine, now projecting approximately 2,350 annual shop visits for 2025-2028, as well as improved profitability assumptions for the LEAP engine.
The broker believes that the momentum in services and the ramp-up of defense activities are the main medium-term catalysts.
Meanwhile, Oddo BHF this morning reaffirmed its Neutral rating on the stock, with a price target raised from 285 euros to 315 euros.
The broker also cites an "impressive" free cash flow generation, exceeding expectations in 2025 and 2026, leading the research firm to raise its cumulative FCF estimate for 2025-28 by around 1 billion euros. The note also highlights a gradual normalization of working capital requirements and favorable prospects in propulsion.
Oddo BHF, however, specifies that EPS revisions remain limited (+0.7%/-0.1%/+0.2% excluding surtax) and maintains assumptions near the upper end of guidance, with adjusted EBIT expected at 6,170 million euros in 2026. "Safran is a quality stock that will continue to benefit from positive EPS momentum, but we believe its valuation is currently fair," the broker concludes, indicating a preference for Rolls-Royce among engine manufacturers.
Safran is a high technology international group, a leading equipment provider in the Aerospace and Defense markets. The group specializes in the design, manufacturing, and marketing of equipment and systems of high technology mechanical and electronic equipment. Net sales break down by product family as follows:
- aeronautic and space propulsion systems (50%): helicopter motors (No. 1 worldwide), civil and military airplanes motors, systems for space lancers and missiles, turboreactors for drone targets, etc.;
- aircraft equipment, defense systems and aerosystems (39.3%): airplane engine pods, landing gear, braking systems, electric wiring systems, etc. Safran also offers on board aircraft systems and equipment (primarily evacuation slides, emergency arresting systems, protective parachutes and oxygen systems, electrical power 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 worldwide), inertial systems, optronic systems, tactical drone systems, etc.);
- aircraft interiors (10.7%): cabin interiors and seats.
Net sales are distributed geographically as follows: France (19%), Europe (23%), Americas (29%), Asia and Oceania (19%), Africa and Middle East (10%).
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