Today's Stock in Paris - Safran Soars After Group Raises Its 2028 Targets

Buoyed by strong momentum in the defense sector, the aerospace equipment manufacturer (stock up 7.39% to EUR330.40) leads the CAC 40 index following its annual performance.

The Group's adjusted net income reached €3,174m, up 3.45% y-o-y. EPS was €7.60, compared to €7.37 in 2024, up 3.12%.

Meanwhile, revenue came in at €31,329m, up 14.7% compared to 2024. This growth was driven by a strong recovery in air traffic, particularly dynamic aftermarket activity (+21.0% for civil engine services), and record production of LEAP engines (1,802 units, +28%).

EBITDA rose by 16.63% to €6,318m, compared to €5,417m a year earlier. Adjusted recurring operating income amounted to €5,197m, up 26%, bringing the margin to 16.6% of revenue, an improvement of 150bp from 2024 (15.1%).

Free cash flow exceeded expectations, reaching €3,921m, up 23% from the €3,189m generated in 2024. This performance is explained by the strength of operating flows, effective working capital management (+€1,070m), despite an increase in investments to €1,800m, compared to €1,543m in 2024.

"2025 was a remarkable year for our activities, driven by record passenger traffic and sustained momentum in defense," said Olivier Andrés, Chief Executive Officer of Safran. "The operating margin improved by 150bp to 16.6% of revenue, and cash generation reached €3.9bn, even as significant investments [...] were made," the executive summarized.

For fiscal year 2026, Safran is targeting revenue growth between 12% and 15%, recurring operating income between €6.1bn and €6.2bn, and free cash flow between €4.4bn and €4.6bn, factoring in an estimated negative impact of €470m related to the exceptional corporate tax contribution.

The group has significantly raised its targets for 2028: average annual revenue growth is now set at around 10% (compared to 7-9% previously), recurring operating income is expected between €7bn and €7.5bn (versus €6bn to €6.5bn), and cumulative free cash flow of around €21bn over the 2024-2028 period (compared to €15bn to €17bn previously).

Analysts Remain Confident on the Stock

Berenberg has reaffirmed its "buy" rating on the stock following these results, with an unchanged price target of €350. The broker notes that the figures are broadly in line on revenue and EBIT, and specifies that FCF is 7% above expectations, supported by customer advances, offsetting an operational performance considered in line with the market's high expectations.

Oddo BHF however, maintains its "neutral" rating with an unchanged TP of €285. While the analyst indicates a preference for Rolls-Royce in the sector, they remind that Safran remains "a quality stock" benefiting from an estimated 2024-2028e EPS CAGR of around 17% and an attractive yield for shareholders.

Jefferies also confirms its "buy" rating on Safran, with an unchanged price target of €360, also praising results in line with expectations and a positive surprise on cash flow. The note highlights the raised 2028 targets, with recurring operating income expected between €7bn and €7.5bn and cumulative cash flow for 2024-2028 of around €21bn, described as "a key positive element."

Finally, Saïma Hussain, who covers the stock for AlphaValue, also mentions results "broadly in line with expectations" and highlights the 2026 forecasts, which "demonstrate the continued strength of the civil aftermarket and defense markets." Overall, "solid execution, strong cash generation, and upgraded medium-term ambitions should support upward revisions; we expect a positive market reaction," she concludes.