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Thales on Track to Meet Full-Year Guidance; Fair Value Estimate Unchanged

Joachim Kotze Equity Analyst

Analyst Note

| Joachim Kotze |

Narrow-moat Thales reported organic order intake and sales growth of 28% and 6%, respectively for the first nine months of the year, with the order intake now back above 2019 levels. The figures exclude the transport segment, which is up for disposal. Several large military and space orders booked year to date are the key driver behind the growth in order intake, while the civil aeronautics business remains depressed. Guidance for the full year remains unchanged, with the group expecting midpoint sales (excluding the transport business) of EUR 16 billion and an EBIT margin of 10%, which is in line with our estimates. The main sales and profit drivers over the medium term will be the continued momentum of the defense and space markets and gradual recovery of the civil aeronautics and biometrics markets. We maintain our EUR 115 fair value estimate and believe the shares are offering good value at current levels.

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Company Profile

Business Description

Thales is a French aerospace and defense industrial firm and is one of Europe’s largest defense contractors with EUR 18 billion in sales. The company has four reportable segments: (1) defense and security provides sensors, mission systems, communications and control systems to European and export defense customers; (2) aerospace sells avionics and satellites to the civil, defense and government markets; (3) transport provides signaling services to rail operators; and (4) digital identity and security provides biometric, data, and identity security solutions.

Tour Carpe Diem, Place des Corolles
Courbevoie, 92400, France
T +33 157778000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 80,569