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SAFRAN SA (SAFRY)
OTHER OTC:SAFRY
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SAFRAN SA
(OTC:SAFRY)
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Rating:74Outperform
Price Target:
$94.00
▲(6.44% Upside)
SAFRAN SA's strong financial performance, highlighted by robust revenue growth and effective cash flow management, is a key strength. The positive earnings call further boosts confidence with increased guidance and strategic acquisitions. However, valuation concerns and net income losses slightly temper the overall outlook.
SAFRAN SA (SAFRY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$148.32B
Dividend Yield0.96%
Average Volume (3M)12.86K
Price to Earnings (P/E)31.5
Beta (1Y)0.69
Revenue Growth14.84%
EPS Growth164.83%
CountryUS
Employees96,390
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)1.09
Shares Outstanding1,694,530,400
10 Day Avg. Volume10,136
30 Day Avg. Volume12,856
Financial Highlights & Ratios
PEG Ratio1.14
Price to Book (P/B)8.90
Price to Sales (P/S)3.27
P/FCF Ratio28.40
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue4.58
Enterprise Value/Gross Profit9.43
Enterprise Value/Ebitda137.86
Forecast
1Y Price Target
$101.90Price Target Upside15.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
SAFRAN SA Business Overview & Revenue Model
Company DescriptionSAFRAN SA (SAFRY) is a French multinational company specializing in aerospace, defense, and security. It operates primarily in the aerospace sector, providing engines, landing gear, and other systems for both commercial and military aircraft. The company also engages in the production of defense and security equipment, including navigation systems and biometric solutions. With a strong focus on innovation and technological advancement, SAFRAN plays a crucial role in the global aerospace and defense markets.
How the Company Makes MoneySAFRAN generates revenue through various streams, primarily by manufacturing and selling aircraft engines and equipment. Key revenue streams include commercial aircraft engines, which are a significant contributor due to partnerships with major aircraft manufacturers like Boeing and Airbus. Additionally, SAFRAN earns income from defense contracts, supplying military engines, avionics, and other defense-related systems to governments and defense contractors worldwide. The company also benefits from maintenance, repair, and overhaul (MRO) services for its products, providing ongoing support and generating recurring revenue. Strategic partnerships and long-term contracts with both commercial and governmental entities are pivotal to SAFRAN's earnings, ensuring a stable income flow from its diverse portfolio of aerospace and defense solutions.
SAFRAN SA Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 13, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong growth and record-breaking performance across key segments, with significant achievements in acquisitions, partnerships, and defense sector expansion. However, challenges such as currency fluctuations, engine production issues, and modest profit margins in certain segments were noted. Despite these challenges, the positive aspects and growth prospects significantly outweigh the negatives.Q2-2025 Updates
Positive Updates
Record Performance and Revenue Growth
Safran delivered a record performance this semester with double-digit growth across all key metrics. Revenue for the first half of 2025 reached EUR 14.8 billion, up 13% on an organic basis. Operating income increased twice as fast as revenue at a rate of 27%, reaching EUR 2.5 billion.
Strong Propulsion Segment Performance
Revenue in the propulsion segment reached EUR 7.5 billion in H1, up 17% year-over-year. Recurring operating income came at EUR 1.8 billion, representing a record 23.3% of sales. The performance was driven by civil aftermarket, spare part revenues up 21.6% in dollars, and start of margin recognition of LEAP-1A RPFH contracts.
Successful Acquisitions and Strategic Partnerships
Safran completed the acquisition of Collins actuation and flight control activities, a major milestone in their aircraft equipment strategy. New partnerships were announced with Bombardier, Diehl, Babcock, and Kongsberg, expanding market opportunities.
Defense Segment Growth
Strong export momentum for the Rafale, with a new contract for 26 Rafale for the India Navy. A significant defense budget increase by NATO members is expected to drive further growth. The commitment is to double revenue base in defense and space activities by 2030.
Negative Updates
Currency Fluctuations Impact
Faced the fastest move in euro-dollar since the '70s, with more than 0.15 euro-dollar appreciation in a few weeks. The team managed to protect the hedging portfolio, but it's an ongoing concern.
LEAP Engine Production Challenges
Supply chain issues and a strike impacted LEAP engine deliveries. The plan is to recover backlogs by the end of October to not affect Airbus' delivery plan.
Aircraft Interiors Marginal Profit
Posted a profit of EUR 27 million in the first half, up EUR 17 million. Despite improvement, the profit margin remains modest.
One-off Financial Charges
One-off items amounted to a negative EUR 37 million, including an impairment charge, restructuring costs, and M&A expenses.
Company Guidance
In the Safran Half Year 2025 Results call, CEO Olivier Andries and CFO Pascal Bantegnie presented the company's robust financial performance, highlighting a 13% organic revenue growth, reaching EUR 14.8 billion. Operating margin hit 17%, within the guidance range of 16% to 18% from December 2021. The civil aftermarket showed strong performance, with a 21.6% increase in spare parts revenue. The company successfully closed the acquisition of Collins actuation and flight control activities, aiming for cost synergies by 2028. Safran also increased its 2025 revenue guidance, expecting to exceed EUR 30 billion, with recurring operating income improved by EUR 200 million at midpoint. Free cash flow guidance was raised by EUR 400 million, benefiting from the Indian Navy's advance payment on the Rafale contract. The defense segment anticipates doubling revenue by 2030, driven by strong export momentum and strategic partnerships.SAFRAN SA Financial Statement Overview
Summary
SAFRAN SA shows strong revenue growth and operational profitability, with effective cash flow management. However, net income losses impact equity and return metrics, posing a challenge for future financial health.Income Statement
The company's revenue has shown consistent growth over recent years, increasing from $15.13 billion in 2021 to $27.72 billion in 2024. However, net income experienced a significant decline, resulting in a negative net profit margin of -2.4% in 2024. The gross profit margin improved to 47.86%, indicating efficient production and sales operations. EBIT and EBITDA margins demonstrate operational profitability, but net losses indicate challenges in managing expenses or exceptional costs.65
Positive
Balance Sheet
SAFRAN SA maintains a relatively stable financial position with a debt-to-equity ratio decreasing to 0.50 in 2024, reflecting good leverage management. However, stockholders' equity decreased, impacting the equity ratio, which stands at 18.5%. The return on equity has turned negative, mirroring the net losses, which is a concern for shareholder value generation.72
Positive
Cash Flow
Despite recent net losses, the company generated healthy free cash flow of $3.19 billion in 2024, demonstrating strong cash management. The free cash flow to net income ratio is positive due to effective operating cash flow generation, which supports financial flexibility and potential for future investments.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 29.29B | 27.72B | 23.65B | 19.52B | 15.13B | 16.63B |
| Gross Profit | 14.22B | 13.27B | 11.21B | 2.19B | 980.00M | 1.08B |
| EBITDA | 973.00M | 676.00M | 4.41B | 3.68B | 1.55B | 1.90B |
| Net Income | 4.32B | -667.00M | 3.44B | -2.46B | 43.00M | 352.00M |
Balance Sheet | ||||||
| Total Assets | 56.09B | 55.01B | 50.47B | 46.83B | 41.72B | 39.53B |
| Cash, Cash Equivalents and Short-Term Investments | 7.07B | 6.76B | 6.68B | 6.93B | 5.35B | 3.75B |
| Total Debt | 5.11B | 5.06B | 6.58B | 6.95B | 7.13B | 7.01B |
| Total Liabilities | 42.31B | 44.29B | 38.38B | 35.96B | 28.45B | 26.78B |
| Stockholders Equity | 13.22B | 10.18B | 11.58B | 10.41B | 12.84B | 12.35B |
Cash Flow | ||||||
| Free Cash Flow | 3.58B | 3.19B | 3.44B | 2.95B | 2.00B | 1.34B |
| Operating Cash Flow | 5.13B | 4.73B | 4.27B | 3.54B | 2.44B | 1.87B |
| Investing Cash Flow | -1.87B | -1.85B | -1.70B | -1.29B | -738.00M | -799.00M |
| Financing Cash Flow | -2.21B | -3.07B | -2.58B | -815.00M | -268.00M | 68.00M |
SAFRAN SA Technical Analysis
Neutral
88.31
Price Trends
87.24
Negative
84.87
Positive
76.27
Positive
Market Momentum
0.27
Positive
43.23
Neutral
33.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SAFRY, the sentiment is Neutral. The current price of 88.31 is below the 20-day moving average (MA) of 88.58, above the 50-day MA of 87.24, and above the 200-day MA of 76.27, indicating a neutral trend. The MACD of 0.27 indicates Positive momentum. The RSI at 43.23 is Neutral, neither overbought nor oversold. The STOCH value of 33.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SAFRY.
SAFRAN SA Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $92.32B | 22.15 | 17.78% | 1.73% | 11.86% | 17.39% | |
75 Outperform | $80.36B | 20.21 | 26.15% | 1.55% | -0.14% | 72.35% | |
75 Outperform | $235.48B | 36.06 | 10.49% | 1.47% | 8.79% | 39.63% | |
74 Outperform | $148.32B | 31.49 | 34.32% | 0.96% | 14.84% | 164.83% | |
70 Outperform | $108.74B | 26.50 | 62.78% | 2.81% | 2.88% | -35.15% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
47 Neutral | $145.79B | ― | ― | ― | 10.19% | -6.03% |
* Industrials Sector Average
SAFRY
SAFRAN SA
86.26
29.32
51.49%
BA
Boeing
185.70
39.62
27.12%
GD
General Dynamics
343.06
68.65
25.02%
LMT
Lockheed Martin
469.91
-50.19
-9.65%
NOC
Northrop Grumman
565.00
81.50
16.86%
RTX
RTX
173.77
56.34
47.98%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.