Mitrade Insights is dedicated to providing investors with rich, timely and most valuable financial information to help investors grasp the market situation and find timely trading opportunities.

2021

Best News & Analysis Provider

FxDailyInfo

2022

Best Forex Educational Resources Global

International Business Magazine

Insights

News

RBC initiates coverage on Safran, sends shares up

Source Investing

Investing.com -- Shares of Safran (EPA:SAF) rose on Thursday after RBC Capital Markets initiated coverage on the stock with an "outperform" rating along with a price target of €240.

At 3:53 am (0753 GMT), Safran was trading 1.6% higher at €199.35.

The positive momentum around the stock is driven by a strong outlook for Safran's core businesses, particularly in aerospace propulsion and aftermarket services.

RBC Capital Markets flagged several key drivers for their rating. The brokerage mentions Safran's leadership in aircraft engines, electronics, components, and interior systems.

Safran's joint venture with GE Aerospace in CFM International—responsible for the widely used CFM56 and LEAP engines—is a factor supporting RBC's positive outlook.

“For 2024, we model €27.4B in revenues, €4.2B in adj. EBIT and €3B in company-defined FCF, largely in line with guidance,” the analysts said.

Safran's Aerospace Propulsion segment, in particular, remains a strong performer, with the CFM56 engine continuing to provide substantial revenue and profit contribution.

“In 2023, we estimate the CFM56 accounted for ~20% of revenues and ~60% of EBIT,” the analysts said.

The commercial aftermarket is expected to provide an upside in the coming years. RBC estimates CFM56 shop visits will peak at around 2,550 in 2025, maintaining elevated levels through 2027.

Airlines continue to invest in the legacy CFM56 engine as delays in new aircraft deliveries push demand for maintenance of older aircraft.

Safran's LEAP engine is expected to reach profitability in original equipment (OE) deliveries by late 2025 to early 2026.

Although the company is currently not booking margins on LEAP services, improved confidence in profitability is expected to serve as a positive catalyst for the stock in the coming years.

RBC also sees room for portfolio adjustments, including potential mergers and acquisitions, and the divestiture of Safran’s Aircraft Cabin business.

These moves could further enhance Safran's capital allocation strategy and provide incremental upside to shareholder returns.

RBC's price target of €240 is based on a ~22x multiple applied to Safran's 2026 free cash flow estimate of €4.7 billion.

The analysts note that Safran's shares are currently trading at a ~15% discount to GE Aerospace based on 2026 free cash flow estimates, which presents a material upside opportunity for investors.

Disclaimer: For information purposes only. Past performance is not indicative of future results.

Recommended Articles

Fed hike odds near 90% into Wednesday's decision — how to trade the dollar, gold and the S&P 500 A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

Author Suzie

Sep 14, Mon

A 0.3% monthly core CPI print has lifted the market-implied probability of a 25bp Fed hike on 16 September to roughly 86.5% ~ 90%, which would be the first increase since July 2023. Here is the decision timeline, the pricing versus the forecasts, both scenarios, and the key levels for the dollar, gold and the S&P 500.

【Daily Brief】10-year Treasury yield briefly tops 5%, S&P 500 slips to 7,602 and the dollar firms at 99.3 as the Fed's decision eve begins The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Author Irene Q.

Sep 15, Tue

The 10-year Treasury yield touched 5.014% on Monday — its first print above 5% since October 2023 — while the S&P 500 closed 0.48% lower at 7,619.98 and the dollar index firmed to 99.3. Here is the full market wrap ahead of Wednesday's FOMC decision, the dot plot and the August retail sales report, plus today's CLARITY Act Senate vote.

Silver breaks $64 as precious metals rebound — can gold hold the $4,280 line into the Fed decision?Silver has climbed back above $64 an ounce for the first time this week, leading a broad rebound across precious metals hours before the Federal Reserve delivers what is expected to be its first rate hike since 2023. Spot silver was last at $64.64, up 1.49% on the day, while gold reclaimed $4,300 and platinum and palladium both advanced. The question now is whether the bounce is a genuine turn — or a pause before the Fed's dot plot decides the next move.

Author Suzie

Yesterday 08: 40

Silver has climbed back above $64 an ounce for the first time this week, leading a broad rebound across precious metals hours before the Federal Reserve delivers what is expected to be its first rate hike since 2023. Spot silver was last at $64.64, up 1.49% on the day, while gold reclaimed $4,300 and platinum and palladium both advanced. The question now is whether the bounce is a genuine turn — or a pause before the Fed's dot plot decides the next move.

Dow drops 631 points as the Fed hikes — but futures are rebounding: what's next for US stocks?The Dow fell 631 points and the S&P 500 closed below 7,600 after the Fed hiked rates for the first time since 2023, with the dot plot showing 16 of 18 officials expect more tightening. Asia-session futures are already recovering — here are the levels and analyst views that decide whether 7,500 holds.

Author Irene Q.

12 hours ago

The Dow fell 631 points and the S&P 500 closed below 7,600 after the Fed hiked rates for the first time since 2023, with the dot plot showing 16 of 18 officials expect more tightening. Asia-session futures are already recovering — here are the levels and analyst views that decide whether 7,500 holds.

Dollar index tops 100 for the first time since July as the Fed's hawkish dot plot sinks in The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Author Irene Q.

13 hours ago

The U.S. dollar index broke back above 100 for the first time since 31 July after the Fed delivered its first rate hike since 2023, with the dot plot showing 16 of 18 officials expect at least one more increase this year. Here are the levels that matter for DXY, the currencies feeling it most, and what to watch next.

Popular Symbols