In major news on French stocks, Airbus Group SE (FR:AIR) aircraft deliveries declined by 16% year-over-year in May amid multiple supply challenges. The company reported 53 deliveries to 34 customers in May, down from 63 deliveries in May 2023. The total deliveries year-to-date were 256, against the target of 800 for the full year.
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Year-to-date, AIR stock has gained 8.6% in trading.
Airbus Group is a leading European aircraft manufacturer, catering to the commercial, defense, and space sectors.
Airbus: Navigating Supply Challenges
Even though Airbus is witnessing a strong demand for its aircraft due to the continued recovery in air travel, it is struggling to keep up with the demand. The company is facing labour and parts shortages, impacting its production of passenger jets. It could further delay the assembly of jets in the second half.
Airbus’s difficulties reflect broader challenges in the aerospace industry, with supply chain disruptions and labor shortages affecting production. The U.S. aerospace giant Boeing (NYSE:BA) earlier highlighted similar issues, disrupting aircraft deliveries.
Nonetheless, Airbus aims to boost its production of passenger jets, planning to increase output to approximately 75 narrowbody planes per month by 2026.
Jefferies Remain Bullish
Analyst Chloe Lemaire from Jefferies called the May numbers a “setback.” He mentioned that the decline was mainly due to multiple holidays in France, impacting Airbus’ two narrow-body assembly lines. However, Lemaire added that the company is capable of covering the shortfall for May with stable deliveries in the second quarter.
Seeing this as a temporary hurdle for the company, Lemaire reiterated his Buy rating on the stock yesterday, predicting 24% upsidepotential. rate. He believes that the company’s efforts to address supply chain issues may not result in immediate relief in June, but may position Airbus for potential near-term gains.
Is Airbus a Good Stock to Buy?
Based on a total of 15 recommendations, AIR stock has received a Moderate Buy rating on TipRanks. It includes 12 Buys, two Holds, and one Sell recommendation. The Airbus share price target is €178.72, which represents 16.5% upside potential in the share price.
