JPM-Airbus SE This cloud had a silver lining；only minor changes to estimates-20251203

This morning, AIR lowered its 2025 aircraft delivery guidance to “around 790”from “around 820”, due to the unexpected discovery of quality issues on someA320 fuselage panels from a supplier. It has maintained its 2025 financialguidance: EBIT Adj. of around € 7.0 bn and FCF of around €4.5 bn. We make verymodest changes to our 2025-28E EPS of +/-1% pa (Table 1). Our multiples-basedDec-26 PT of €240 is unchanged, for potential upside of 20% over the next 12months.

We are not changing our 2026 aircraft delivery estimate: We continue toforecast 904 deliveries in 2026 (BBG consensus: 926). It is possible that AIRcould do better or worse than our estimate. If the faulty fuselage panels can befixed quite quickly, then in theory AIR could deliver c30 aircraft in 2026 thatshould have been delivered in late 2025; this could mean upside to our forecast.On the other hand, the problem may take longer to fix and/or cause someincremental issues in early 2026. We simply don’t have enough visibility at thispoint, so we have left our delivery estimates unchanged.

We lower our 2025E EBITA by only €97m: Every A320 delivery shouldgenerate c€15m of incremental EBITA on average, so delivering 30 less A320sshould reduce 2025 EBITA by €450m, all other things being equal. However,we reduce our 2025E EBITA by only €97m, due to two positive factors. First,we have increased our estimates for Airbus Defence & Space. We hadconsidered doing this after the better than expected 9M 25 results in thatdivision but it seemed sensible to keep a buffer given that AIR’s commercialaircraft delivery target looked very challenging at the start of Q4 25. Second,we have assumed that AIR is able to achieve some temporary cost savings,including lower R&D in Q4 25.

Maintaining the 2025 FCF guide: This is quite impressive, since c70% of theprice of a plane is made on delivery. The simple maths of 30 fewer A320deliveries should be c€50m * 30 * 70% = c€1bn less FCF. We don’t how AIRhas offset this but it might be down to very good working capital management.