In a recent analysis, Aymeric Poulain, Chief Analyst of Aerospace & Defense at Kepler Cheuvreux, delves into the emerging value of Saab but highlights the challenges in pinpointing catalysts for upgrades. Poulain maintains his recommendation for Saab stock with a target price of 245 kronor for the OMXS30 company.
The analysis points out that Saab is poised for significant revenue growth, potentially reaching 100 billion kronor in sales by 2027, driven by the current order backlog and Sweden’s robust defense investments. However, Poulain notes that the company fell short of expectations in terms of margins and cash generation in 2024, indicating that market expectations may be overly optimistic at this stage.
Moreover, the aerospace and defense sector is experiencing a downturn as it awaits a resolution to the conflict in Ukraine. Poulain emphasizes that Saab is currently valued 25% higher than comparable European companies, suggesting that its valuation is relatively high. He cautions that there are no clear factors on the horizon that could further elevate this valuation.
The analysis highlights the complexities and uncertainties surrounding Saab’s future growth prospects, underscoring the need for a nuanced understanding of the company’s positioning within the broader market landscape. As geopolitical tensions continue to impact the sector, investors and analysts alike are closely monitoring developments to gauge the potential implications for Saab and its peers.
Overall, Poulain’s assessment paints a comprehensive picture of Saab’s current standing and the challenges it faces in realizing its full potential. By providing a detailed analysis of the company’s strengths and weaknesses, he offers valuable insights for investors seeking to navigate the intricate dynamics of the aerospace and defense industry.