THALES : Oddo BHF confirms its recommendation on the stock
January 18, 2024 at 09:50 am EST
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Oddo BHF maintains its 'neutral' rating on Thales shares, with an unchanged target price of 146 euros.
With Thales due to publish its 2023 results on March 5, Oddo BHF does not anticipate 'any major surprises', believing that the trends observed in the first nine months have continued into the last quarter.
We are expecting EBIT of ME2,116 on organic sales growth of 6.5% to ME18,216 (css VA ME2,110 and ME18,185 respectively), representing a margin of 11.6% (+61 bp)", the analyst adds.
Oddo BHF adds that order intake could 'tangent' to 22 BnE (Book-to-bill of 1.2x) with the signing of at least 4 major orders unveiled over Q4 2023, i.e. a backlog offering visibility of over 31 months.
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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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