Thanks to a strong end to the year on the commercial level, the European consortium should do much better than its American competitor Boeing. 2021 will be the start of the turnaround that can be played with stability.
Airbus will end 2020 on top of the hats in terms of aircraft deliveries. Far from the 880 planes planned before the health crisis precipitated the aviation industry to the bottom, the Toulouse group still exceeded expectations (524 deliveries according to the consensus gathered by Factset) by delivering 560 aircraft last year. Compared to its American competitor Boeing, entangled by the successive disasters of the 737Max, which had delivered only 118 aircraft at the end of November, Airbus did much better. The performance of the European manufacturer confirms that the low point was hit in the first half with a cash consumption of 12.8 billion and an operating loss of 1.56 billion and that it has now entered a phase of recovery. Thanks to great agility to reduce production rates to 40 A320s and A321s per month and the elimination of 15,000 jobs, the group has adapted its cost structure and stopped burning cash in the third quarter. It should be able to gradually increase production again to 47 single-aisle aircraft per month and deliver around 632 aircraft this year. At this stage, a return to positive operating income of 3.5 billion to 3.9 billion and a generation of 1.7 billion in net cash flows are expected. Prospects already partly valued at 31 and 20.8 times the estimated profits for this year and 2022, after a catch-up of 42% of the title over the last three months.
It’s all or nothing with stability
However, it is possible to bet on the record by means of stability. The one selected is issued by Société Générale with a deadline set on March 19, 2021 and two terminals located at 75 euros for the lowest and 110 euros for the highest. Remember the principle of stability: it will be reimbursed at maturity at 10 euros provided that the Airbus share continues to evolve within the fluctuation zone delimited by the two limits. Given its purchase price, the certificate is likely to deliver a 67% gain in two and a half months. For a high risk, however, because in the most pessimistic hypothesis of an exit from the stock up or down the fluctuation corridor defined by the two limits, the stability will lose all of its value.
Our advice: buy an Airbus stability issued by Société Générale (code: LU2088855536); deadline: March 19, 2021; terminals: 75/110 euros; price: 5.97 euros; portion: 1.