Airbus shares jump as planemaker sets out targets and share buyback
Airbus Announces Share Buyback and Sets New Mid-Term Targets
By Alessandro Parodi, Sarah Young and Tim Hepher
FARNBOROUGH, England, July 22 (Reuters) - Airbus shares jumped sharply on Wednesday after the European planemaker launched a €5 billion ($5.7 billion) share buyback and unveiled new mid-term targets including a near doubling of profits by 2029.
Investor Confidence and Shareholder Returns
Handing investors a more bullish picture of the supply chain on the sidelines of the Farnborough Airshow, where delegates said the industry is turning a corner after parts shortages, Airbus increased its target for overall shareholder returns.
Its shares were up more than 6% in late trading.
Analyst Reactions and Profit Guidance
The mid-term profit guidance seemed conservative to some analysts but plugged a gap called out by some shareholders.
"Airbus’ lack of longer-term guidance has long been a grievance with investors, and we think providing this forecast will help a lot in providing more assurance," said Vertical Research Partners analyst Rob Stallard.
Profit and Production Targets
Airbus is targeting a core profit of €12 billion to €13 billion in 2029, up sharply from €7.13 billion last year and well above a 2026 target of €7.5 billion.
Airbus is aiming to increase narrowbody jet production to 70 to 75 a month in 2027 from around 60 now, but remains in talks over 2027 engine supplies from Pratt & Whitney.
Wide-Body Aircraft and Engine Partnerships
Rolls Sees A350 Decision Soon
It also sees strong demand for the wide-body A350 and reiterated it was studying a stretched version. But it declined to comment on the timing after the CEO of engine maker Rolls-Royce said Airbus could decide within 12 months.
Rolls-Royce CEO Tufan Erginbilgic said on Tuesday that Airbus was talking to airlines that were interested. "We are working with them," he told reporters.
Production Plans for A350 and A220
Airbus Commercial CEO Lars Wagner said the company aimed to decide this year on higher production for the A350, landing somewhere between the current goal of 12 a month and 20.
Airbus is also looking at stretching its smaller A220.
Future Outlook and Leadership
Financial Expectations and Delivery Targets
Airbus expects its main commercial aircraft business to generate around €10 billion in operating profit in 2029 and maintained a delivery target for 2026.
Leadership and Governance
Asked whether he planned to seek a fourth stint as CEO when his mandate expires in 2028, Guillaume Faury did not rule out staying on to deliver on the new targets.
"I am fully available for the board to do what they think is appropriate for the company and enjoy what I'm doing," Faury said, adding that he was surrounded by a team of leaders.
"It's not about a one-man show. It's still about the team making it happen," he said.
The issue of appointments is sensitive at Airbus, which adopted market-friendly governance in 2013 after years of Franco-German power-sharing, but which continues to pay attention to the balance of nationalities.
Sources say that Airbus' decision to name longstanding board member Amparo Moraleda of Spain as its next chairperson, rather than making the expected choice of a French candidate to succeed Germany's Rene Obermann, had provided flexibility for Faury to stay on.
While there is no longer a strict rule, Airbus tends to avoid having two French or two German people in the top jobs.
(Reporting by Alessandro Parodi in Gdansk, additional reporting by Tim Hepher, editing by Milla Nissi-Prussak and Sharon Singleton)
