After the strong price increase that has been seen over the past few weeks, it appears opportune to anticipate a correction phase for shares in Safran, as the resistance around 136.86 EUR approaches.
Summary
● The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.
● Overall, and from a short-term perspective, the company presents an interesting fundamental situation.
Strengths
● The company's earnings per share (EPS) are expected to grow significantly over the next few years according to the consensus of analysts covering the stock.
● The company is in a robust financial situation considering its net cash and margin position.
● Over the past year, analysts have regularly revised upwards their sales forecast for the company.
● Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.
● Analysts covering this company mostly recommend stock overweighting or purchase.
● The average price target of analysts who are interested in the stock has been strongly revised upwards over the last four months.
● Analyst opinion has improved significantly over the past four months.
● Consensus analysts have strongly revised their opinion of the company over the past 12 months.
Weaknesses
● The firm trades with high earnings multiples: 28.99 times its 2023 earnings per share.
● The company appears highly valued given the size of its balance sheet.
● The group usually releases earnings worse than estimated.
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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 (51.2%): 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 (38%): 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;
- other (0.1%).
Net sales are distributed geographically as follows: France (19.4%), Europe (24%), the Americas (34.8%), Asia and Oceania (13.2%), Africa and the Middle East (8.6%).