Airbus (EU:AIR) moved higher on Thursday after Kepler Cheuvreux upgraded the aerospace manufacturer to Buy from Hold and increased its price target, pointing to improving industry conditions and a stronger outlook for the company.
Shares in the European aircraft maker gained 3.4% in Paris trading by 08:27 GMT as investors responded positively to the broker’s revised assessment.
Broker Sees More Supportive Environment
Kepler analyst Aymeric Poulain said the aerospace sector is benefiting from a more favourable macroeconomic backdrop, including expectations that the reopening of the Strait of Hormuz could help ease energy costs through lower oil prices.
“After several months of macro-driven hesitations, we upgrade Airbus to a Buy and raise our TP back to EUR212/share,” he wrote in a note, adding that deliveries are set to accelerate as supply-chain and production issues are now being managed and reflected in guidance.
The brokerage lifted its target price for Airbus to €212 from €196, reflecting growing confidence in the company’s production outlook and earnings potential.
Supply Chain Improvements Support Production Growth
Poulain highlighted recent comments from Boeing regarding its production plans as evidence that supply chain constraints across the aerospace industry are gradually easing.
He noted Boeing’s confidence in reaching a production rate of 52 Boeing 737 aircraft per month next year, alongside its willingness to target 70 aircraft per month over the medium term.
According to the analyst, these developments suggest suppliers are increasingly capable of supporting Airbus’s own production ramp-up plans.
Engine Dispute Remains Key Uncertainty
Despite the improving outlook, Kepler identified the ongoing issue involving Pratt & Whitney’s GTF engines as the main outstanding challenge facing Airbus.
Poulain described the situation as “the main unresolved but temporary issue” in Airbus’s production equation, and that a resolution could offer additional upside.
The analyst added that he currently sees no structural reason for Airbus to lower its 2026 guidance and believes the company retains several opportunities to improve profitability.
Delivery Growth Could Drive Further Gains
Kepler also pointed to potential margin expansion within Airbus’s commercial aircraft business, as well as opportunities within its Defence & Space division and broader balance sheet management.
Poulain said the expected acceleration in aircraft deliveries during the second half of the year could act as a catalyst for further share price appreciation.
The analyst believes stronger operational execution and rising deliveries could support a return to double-digit shareholder returns over the next 12 months.
Investors Focus on Production Momentum
The upgrade reflects growing optimism that Airbus is moving beyond many of the production and supply chain challenges that have constrained the aerospace industry in recent years.
With demand for new aircraft remaining robust and manufacturing conditions showing signs of improvement, investors will be closely watching delivery performance and production rates through the remainder of the year.
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