AIR FP
Airbus Group SE
Industrial/Transportation
08/12/2016
Presented
| Date | 08/10/2016 |
| Price | €51.20 |
| Market Cap | $44.41B |
| Ent Value | $46.80B |
| P/E Ratio | 13.58x |
| Book Value | €7.84 |
| Div Yield | 0.03% |
| Shares O/S | 778.86M |
| Ave Daily Vol | 2,205,939 |
| Short Int | N/A |
Current
| Price | €135.76 |
| Market Cap | $119.68B |
| Airbus Group SE manufactures and sells commercial & military aircraft, civil & military helicopters, commercial space launch vehicles, missiles, satellites, defense systems and electronics. The company operates its business through the following segments: Airbus, Airbus Helicopters, Airbus Defence & Space. The Airbus segment develops, manufactures, markets and sells commercial jet aircraft and military transport and special mission aircraft. The Eurocopter segment engages in civil and military helicopter marketing and also provides related services. The Airbus Helicopters segment develops, manufactures, markets and sale of civil and military helicopters, provision of helicopter related services. The Airbus Defence and Space segment provides defence electronics and global security market solutions such as integrated systems for global border security and secure communications solutions and logistics; training, testing, engineering and other related services; development, manufacturing, marketing and sale of missiles systems; development, manufacturing, marketing and sale of satellites, orbital infrastructures and launchers; provision of space. The company was founded on December 29, 1998 and is headquartered in Leiden, Netherlands. |
Publicly traded companies mentioned herein: Airbus Group SE (AIR FP), Boeing (BA), General Electric Company (GE), Rolls-Royce Holdings plc (RR/ LN)
Highlights
The presenter is long shares of Airbus Group (AIR FP) and said it is his “favorite investment in the industrial sector at this time”. The macro setup is attractive with narrow body trends in favor and 80% of Airbus’ units being single aisle planes, and the relative risk/ reward for shareholders is extremely attractive with the stock trading at ~51 (EUR; please note, all figures herein are euros unless otherwise specified). This is just 6.4x his 2019 CF/ share estimate of 8 (up from <1 today). The stock is also cheap on an earnings basis, as he sees EPS growing from 3.20 this year to 7 (2019). Given 1) the fundamental strength of the business and demand for narrow body aircraft, 2) the measures management took to de risk the story during Q2, and 3) the cash flow generation he sees coming within the investment time horizon, it is likely that the stock will re rate “significantly” higher.
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