Airbus Shares Jump 7% After Major Investor Update
Airbus shares surged by around 7% on Wednesday after the European aerospace group announced a €5 billion share buyback programme and introduced a new profit target for 2029.
The company plans to complete the buyback over three years. It also expects adjusted earnings before interest and taxes, or EBIT, to reach between €12 billion and €13 billion by 2029.
Airbus Presents Its Long-Term Growth Strategy
Airbus revealed the new targets during a Business Update for investors and analysts in London.
Chief Executive Guillaume Faury and other senior executives discussed the company’s strategy, financial outlook and long-term growth plans.
Management also provided updates on Airbus Commercial Aircraft, Helicopters, and Defence and Space.
€5 Billion Share Buyback Approved
The Airbus Board of Directors approved the €5 billion share repurchase programme.
Management will carry out the buyback under conditions approved by the board. However, the programme remains subject to continued shareholder approval.
Share buybacks can support a company’s stock price by reducing the number of shares available in the market. They can also increase earnings per share and return excess capital to investors.
Airbus Sets €12 Billion to €13 Billion EBIT Target
Airbus said its 2029 adjusted EBIT target assumes a euro-to-dollar exchange rate of 1.22.
The company also maintained its goal of achieving cash conversion of approximately one over a five-year period.
Meanwhile, Airbus confirmed that its financial guidance for 2026 remains unchanged.
Strong Demand Supports Airbus Growth Plans
Faury said Airbus is increasing production across all of its major businesses to meet strong demand.
The company continues to see significant interest in its commercial aircraft, military equipment and other aerospace products.
According to Faury, Airbus is focused on delivering profitable growth while creating value for customers, employees, partners and shareholders.
He added that the company would continue investing in sustainable aerospace and innovative civil and military solutions.
Outlook Depends on Stable Global Conditions
Airbus said its projections assume that no major new disruptions affect the global economy, international trade or air travel.
The outlook also assumes stable supply chains, normal internal operations and no significant restrictions on the company’s ability to manufacture and deliver products.
Airbus expects trade rules and tariffs to remain broadly consistent with current conditions.
The targets do not include the possible financial impact of future mergers or acquisitions.
Morgan Stanley Calls Update More Bullish Than Expected
Morgan Stanley described the Airbus presentation as more positive than analysts had anticipated.
The bank maintains an “overweight” rating on Airbus shares and has set a price target of €227.
Morgan Stanley identified the €5 billion buyback as the biggest surprise in the company’s announcement.
According to the bank, the programme represents around 1% of Airbus’ market value per year.
Airbus Plans Significant Shareholder Returns
Morgan Stanley estimated that the buyback represents approximately 25% of expected cumulative free cash flow between 2026 and 2028.
Including dividends, Airbus is expected to return around 60% of its cumulative free cash flow to shareholders during the next three years.
This capital-return plan could strengthen the investment case for Airbus, particularly if the company meets its production and profitability goals.
Commercial Aircraft Expected to Lead Earnings
Morgan Stanley said Airbus Commercial is expected to contribute approximately €10 billion to the company’s future earnings target.
The Defence and Space division is projected to generate around €1.3 billion, while the Helicopters business is expected to contribute approximately €1.2 billion.
Commercial aircraft therefore remain the main driver of Airbus’ long-term profit outlook.
Airbus Updates A320 Production Target
Airbus also provided new information about production of its popular A320 aircraft family.
The company now expects to manufacture between 70 and 75 A320 aircraft per month during 2027.
However, the presentation did not repeat Airbus’ previous guidance that production would remain at 75 aircraft per month beyond that date.
The revised wording could suggest that Airbus is taking a more cautious approach to future production rates amid ongoing supply-chain challenges.
Airbus Outlook Boosts Investor Confidence
The combination of a major share buyback, strong shareholder returns and a higher long-term earnings target helped lift Airbus shares.
Investors will now focus on whether the company can increase aircraft production, maintain supply-chain stability and deliver its 2029 profit objectives.
