Aerospace supplier industry
Note: This is a daily stock update and the information stands true as of 08/10/24, 09:00 CET.
Company Update:
Expert Opinion:
This kind of news was widely expected. However the longer the strike at Boeing lasts, the more earnings in 24 are at risk. We will likely have to cut our estimates for Safran. The only potential player to benefit from this could be Airbus as some suppliers may have some more latitude to focus on, Airbus deliveries. However, I believe that the financial risk on the suppliers (many suppliers work for both Boeing and Airbus) is also a significant risk for Airbus.
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Company Update:
Boeing requested Safran to stop deliveries of some pieces in order to preserve its cash during the strike. Safran generates as much sales with Boeing as it does with Airbus. Boeing is a key clients for many companies within the supply chain (€6.3bn in procurement to French companies back in 2018). This could jeopardize some companies that are facing issues to cope with the increased prices of raw materials and the shortage of qualified workers.
Most impacted is obviously Safran as the engine producer jointly with GE but also for seats, wheels, electronics etc. The second order effect is that more fragile French suppliers may put at risk Airbus own supply chain. Ergo nobody benefits from Boeing deepening problems.
Expert Opinion:
This kind of news was widely expected. However the longer the strike at Boeing lasts, the more earnings in 24 are at risk. We will likely have to cut our estimates for Safran. The only potential player to benefit from this could be Airbus as some suppliers may have some more latitude to focus on, Airbus deliveries. However, I believe that the financial risk on the suppliers (many suppliers work for both Boeing and Airbus) is also a significant risk for Airbus.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach out to us at sales@alphavalue.eu
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Solid start of 2025 with signs of recovery in key markets.