Oddo BHF reiterates its 'neutral' opinion on Thales, but raises its target price from €137 to €146, following the completion of the Imperva acquisition, which it believes 'offers critical size in cyber' for the high-tech group.
According to the analyst, this "first sizeable acquisition will enable us to shape a new Thales with a more attractive growth and cash generation profile", who slightly lowers his EPS estimates for 2023-24, but raises them slightly for 2025-26.
On the basis of its price target, the stock would trade on a sliding 12-month PE of 17 times, i.e. a very slight premium to its 10-year average and a premium of around 25% to European defense peers', it also notes.
Copyright (c) 2023 CercleFinance.com. All rights reserved. The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
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%).
THALES 
