Airbus: UBS still a buyer after CSeries.
(CercleFinance.com) - UBS has confirmed its buy rating on the Airbus share after the announcement of European aircraft manufacturer's takeover of the CSeries program of its Canadian competitor Bombardier Aerospace.
UBS has a 12-month target price of 90 euros.
Airbus announced last night that it was about to take a 50.01% stake of Bombardier Aerospace's CSeries medium-haul aircraft program, which includes aircraft with 100 to 150 seats. Airbus will not pay anything at first, apart from term investments. The seller undertakes to cover 700 million dollars of investments after closing the deal, which is scheduled for the second half of 2018.
In 2015, UBS reminds us that Airbus had already opened the "CSeries file", without following through. "Now the C Series is a more proven aircraft, with majority of its development and introduction costs behind," UBS comments, which believes that the CSeries is expected to reach its break-even point "around 2020".
In addition, "Consolidation of the industry is a growing trend," UBS points out, which considers the operation "sensible", especially as Airbus does not think it will "derail" its financial trajectory.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
UBS has a 12-month target price of 90 euros.
Airbus announced last night that it was about to take a 50.01% stake of Bombardier Aerospace's CSeries medium-haul aircraft program, which includes aircraft with 100 to 150 seats. Airbus will not pay anything at first, apart from term investments. The seller undertakes to cover 700 million dollars of investments after closing the deal, which is scheduled for the second half of 2018.
In 2015, UBS reminds us that Airbus had already opened the "CSeries file", without following through. "Now the C Series is a more proven aircraft, with majority of its development and introduction costs behind," UBS comments, which believes that the CSeries is expected to reach its break-even point "around 2020".
In addition, "Consolidation of the industry is a growing trend," UBS points out, which considers the operation "sensible", especially as Airbus does not think it will "derail" its financial trajectory.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.