Airbus Group SE (FR:AIR) announced its plans to eliminate up to 2,500 job positions in its Defense and Space segment. This major step is intended to streamline the European aerospace giant’s operations as it faces ongoing financial challenges. Airbus shares gained 3.34% as of writing.
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Airbus Group is a leading European aircraft manufacturer, catering to the commercial, defense, and space sectors.
Airbus Joins Boeing in Job Cuts
This news follows the recent announcement from Airbus’ American counterpart Boeing (BA), which revealed plans to reduce approximately 10% of its workforce amid an ongoing machinist strike.
Airbus will trim 7% of its second-largest division’s workforce by mid-2026 following discussions with unions. According to AFP news, these cuts are part of a larger restructuring effort that comes after a year-long comprehensive efficiency review of the company’s Defense and Space division, named ATOM. The job cuts at Airbus and Boeing highlight the financial pressures the aerospace sector is currently experiencing.
Furthermore, Airbus has been experiencing significant losses, especially in its Space Systems division, where initiatives such as OneSat have encountered delays along with rising expenses.
In H1 2024, Airbus reported an adjusted EBIT (earnings before interest and tax) of negative €807 million in its Defense and Space segment, marking a significant decline from €78 million in H1 2023. This drop was primarily due to €989 million in charges in its Space Systems division.
Jefferies Maintains Bullish Stance
Yesterday, analyst Chloe Lemaire from Jefferies confirmed a Buy rating on AIR stock, predicting a growth rate of 17.4%. Lemaire expects a stable EBIT in the commercial sector, driven by cost savings and product mix.
Additionally, Lemaire noted that the outlook in the Defense and Space segment is stable compared to last year, despite the negative projection of free cash flow. Also, the company does not plan to change its guidance, showing confidence in its current strategy and operations.
Are Airbus Shares a Good Buy?
Based on a total of 15 recommendations, AIR stock has received a Moderate Buy rating on TipRanks. It includes eight Buys, three Holds, and one Sell recommendation. The Airbus share price target is €156.08, which represents a favorable change of 12% in the share price.
