Jefferies announced on Tuesday that it had downgraded its recommendation on Thales from 'buy' to 'hold', with a price target lowered from 140 to 135 euros.

After a 59% leap last year, which made it the best performer on the CAC 40 in 2022, the share's recovery process is now complete, says the broker in a note dedicated to the aerospace sector.

Jefferies also explains that it expects only 5.5% organic growth from the French equipment manufacturer in 2023, compared with +6% in the past financial year.

The broker also adds that it has lowered its forecasts for the Group this year due to component shortages in the aeronautics industry and recessionary pressures likely to affect its SIM card business.

While the spare parts market should benefit from the upturn in air traffic and firm sales prices, Jefferies points out that Thales shares are currently trading at a 12% premium to their historical average, a level it considers justified in view of the Group's resilience, but sufficient given the current economic context.

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