Airbus stock: Focus remains on September

Investing.com — Airbus SE (EPA:) on Friday reported a slight dip in deliveries in August, with the company delivering 47 aircraft and receiving 45 new orders. 

August is a slower month for Airbus, reflecting seasonal trends such as European vacations. 

For this reason, the month’s performance, where deliveries accounted for only 6.1% of the company’s 770 aircraft target for the fiscal year, is not entirely surprising but slightly below the typical average of 6.7%, said analysts from Citi Research in a note.

In August, Airbus recorded 45 first flights, a decline from both the monthly average of 5.8% and the year-to-date average of 60.5%. 

“August is an outlier month with European vacations –September will be a better indicator of whether FY targets are likely to be met,” the analysts said.

With 447 deliveries achieved so far, Airbus has reached 58.1% of its annual target, slightly surpassing the recent average of 57.2%. 

The backlog remains substantial at 8,564 aircraft, and year-to-date orders have matched the number of deliveries, suggesting a healthy balance in the order and delivery pipeline.

However, several risks could impact Airbus’s stock performance and potentially affect its ability to reach the target price. Changes in societal attitudes towards air travel, driven by the aftermath of the COVID-19 pandemic, could influence long-term demand. 

Uncertainty around near- to medium-term aircraft deliveries poses another risk. Additionally, increased demand for vendor financing could strain cash flows, particularly if credit markets tighten or export credit agency support is not forthcoming. 

Currency fluctuations, specifically an appreciation of the euro against the US dollar, might also impact profitability. The inherent complexity of Airbus’s business adds another layer of uncertainty, making it challenging to model and value accurately.

Citi analysts caution that if these risks materialize more significantly than anticipated, they could impede Airbus’s share price from reaching the projected target. Conversely, if these risks prove less impactful, there may be potential for the stock to exceed expectations.

Shares of the airline was down 1.2% at 6:50 am (1050 GMT).