Airbus

Positive read-through: Airbus would have delivered 81 aircraft in May versus 51 a year ago, bringing YTD deliveries to c.+19 aircraft versus the same period last year. Importantly, Airbus appears to have finally released the c.20 aircraft that had been caught up in the Chinese administrative hurdles, suggesting that some of the delivery bottlenecks seen earlier in the year are now easing.

More importantly, this suggests Airbus is gradually converting its stored inventory into revenues and cash, which will be critical if the company is to achieve its 2026 targets, both in terms of 870 aircraft deliveries and €4.5bn of FCF before customer financing.

Of course, we remain mindful of the ongoing supply-chain constraints, particularly around engine availability and other critical components. Nevertheless, May's delivery performance is an encouraging sign that execution is moving in the right direction.

Expert Opinion:
We still like Airbus over the long run. Strong duopoly in commercial aircraft until the Chinese Comac eventually comes in. Demand is structurally larger than supply for the foreseeable future. Valuation only stands at 23.7x PE26 and 19.5x PE27, which is a given when compared to Space X, we expect that anything remotely related to Space (and Airbus has a very prominent division dedicated to space  Airbus Defence and Space) will rerate in the wake of Space X IPO. Still a key BUY and Hold in our book. 

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