Airbus shares jump on Etihad deal speculation, JP Morgan raises PT

Investing.com — Airbus (EPA:) shares rose on Thursday, spurred by circulating rumors about a potential deal with Etihad Airways and a bullish upgrade from JP Morgan analysts. 

At 7:23 am (1123 GMT), Airbus was trading 3.4% higher at €140.58.

As speculation of a major order from Etihad grew, the aerospace giant’s order book was expected to gain momentum, fueling market optimism.

Adding to the momentum, JP Morgan raised its price target for Airbus to €180 from €172 , “whilst we still see some downside risk to consensus aircraft delivery estimates, we think this could be offset by cost reduction,” the analysts said.

Despite a challenging year with flat aircraft deliveries in the third quarter, Airbus has taken measures to safeguard profitability. 

JP Morgan noted that Airbus achieved unexpected savings of €100-200 million in Q3 2024, mainly driven by its LEAD! initiative. 

This initiative, though largely kept under wraps until recently, has been a key factor in maintaining stable earnings despite external pressures such as unfavorable foreign exchange rates and inflationary headwinds.

JP Morgan flagged that while deliveries remain slightly below previous expectations, Airbus’ robust backlog and production plans into 2030 provide a solid foundation for future earnings. 

The analysts also mentioned that the Etihad deal, if confirmed, could be a major factor in supporting Airbus’ long-term growth and competitiveness in the commercial aircraft sector.

Additionally, the cost-cutting efforts in Airbus’ Defense & Space division, which includes a planned reduction of 2,500 jobs by mid-2026, were seen as a positive development. 

JP Morgan believes that these efforts will not only offset the short-term challenges but also provide long-term financial benefits, making the stock an attractive prospect for investors.