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

Bitcoin falls below $75,000 as the CLARITY Act fails in the Senate — what the vote means for crypto The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

Author Suzie

Sep 16, Wed

The US Senate blocked the Digital Asset Market CLARITY Act in a 49-50 procedural vote, sending Bitcoin briefly below $75,000 — its biggest one-day drop since June. Ethereum fell more than 8%, Coinbase slid 10% and $75 billion of crypto market value evaporated. Here is what the vote was, why it failed, and the levels that matter now.

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.

Sep 17, Thu

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.

Gold ends three-week slide at the $4,400 line — eight straight days of ETF inflows vs a 5% 10-year and a 100 dollar Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Author Suzie

Sep 20, Sun

Spot gold closed Friday at $4,378.39, up 0.84% on the day and about 0.8% for the week — its first weekly gain in four weeks — with the intraday high of $4,399.67 leaving it 33 cents shy of the $4,400 line. Gold ETFs have now logged eight straight sessions of inflows, but with the 10-year back above 5% and the dollar index near 100, here is what decides whether this is a reversal or a bounce.

Gold Price Forecast: Gold Eyes Key $4,400 Resistance as Falling Oil Prices Ease Inflation Pressure As of the Asian session on September 21, gold prices (XAUUSD) maintained high-level consolidation intraday today following a strong rebound last week, with the latest price trading around

Author TradingKey

Sep 21, Mon

As of the Asian session on September 21, gold prices (XAUUSD) maintained high-level consolidation intraday today following a strong rebound last week, with the latest price trading around

Dollar holds above 100 near a 3-month high — three Fed speakers and a $69 billion auction land tonight The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

Author Suzie

18 hours ago

The dollar index closed at 100.43 on Monday, its highest close since late July, after a weekly gain of about 1% — the best in more than three months — and is holding above the 100.00 handle in Asia. Three Fed officials speak tonight alongside a $69 billion two-year note auction, the first leg of $183 billion of Treasury supply this week.

Popular Symbols