THALES : Morgan Stanley returns to 'weight in line
January 24, 2024 at 08:13 am EST
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Morgan Stanley resumed its monitoring of Thales shares on Wednesday, with a "weight in line" recommendation and a price target of 150 euros, explaining that it sees few catalysts in the short term.
In a research note, the analyst points out that the French electronics group's shares have remained trapped in a limited trading range over the past 12 months, underperforming the sector by around 20% despite buoyant elements such as the strength of the defense market.
In its view, several factors should continue to hold back the stock's performance this year, starting with over-ambitious consensus forecasts in view of the company's disappointing performance in the space business.
The intermediary also fears a reduced distribution of capital due to the need to integrate Imperva, and adds that it is ruling out further share buybacks beyond the current program.
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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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