Airbus FY preview: Where next for the Airbus share price?

Finger pointing on market chart data
Josh Warner
By :  ,  Market Analyst

When will Airbus report FY earnings?

Airbus is scheduled to release annual results for 2021 on Thursday February 17.

 

Airbus FY earnings preview

Airbus delivered 611 commercial aircraft in 2021 compared to the 566 delivered in 2020, and that was also ahead of the 600 planes it aimed to shift during the year. That meant Airbus captured around 78% of the market in terms of deliveries whilst its main rival Boeing, which has faced a slew of internal problems with its aircraft, only shifted 340 planes to take 22% of the market.

For context, Airbus took 64% of the market in terms of deliveries in 2020 versus Boeing’s 36%, demonstrating it has been able to capitalise while Boeing has been on the back foot. There is also evidence that some airlines have switched over to Airbus to avoid being caught up in Boeing’s problems. Boeing secured the lion’s share of gross orders made in 2020 but that changed last year with Airbus securing 68% of orders.

Analysts forecast Airbus will report a 4.8% rise in annual revenue to EUR52.3 billion in 2021 from the EUR49.9 billion booked the year before. That will be driven by a 6% rise in sales of commercial aircraft and a 5.1% increase in helicopter sales, partly offset by a mild 0.5% decline in revenue from its defence and space division.

Orders also started to recover in 2021 with Airbus securing 507 net orders compared to just 268 in 2020, as airlines resumed ordering new planes as they prepare for the travel industry to gradually recover over the coming years. It ended the year with a backlog of orders for 7,082 aircraft.

Adjusted Ebit – a headline earnings measure for the company – is forecast to soar to EUR4.66 billion from just EUR1.70 billion last year, when the result was heavily impacted by the dramatic drop in demand during the pandemic and hefty restructuring costs. That would be above the EUR4.5 billion being targeted by the company. Still, that would still be below the EUR6.95 billion delivered before Covid-19 hit in 2019, showing there is further room to bounce back.

Reported Ebit is also set to recover to EUR4.68 billion from the EUR510.0 million loss seen last year for the same reasons.

The outlook for 2022 will be under the spotlight, with Airbus having already signalled that it plans to continue ramping-up production in 2022 to meet the anticipated rise in demand. Analysts forecast Airbus can deliver around 740 commercial aircraft in 2022, with 159 pencilled in for the first quarter. Revenue is forecast to grow over 15% this year to recover back over EUR60 billion while adjusted Ebit is expected to grow almost 23% to EUR5.72 billion.

Airbus dropped its dividend in order to counter the outflow of cash it suffered during the pandemic and although it has started generating cash again this year its payout is not expected to return anytime soon as it continues to wait for cashflow to stabilise. Ratings agency Fitch said last October that it expected Airbus ‘to gradually re-start its dividend in the medium term,’ adding that cashflows are not expected to return to pre-pandemic levels until 2022 at the earliest.

 

Where next for the Airbus share price?

The 50-day sma moved back above both the 100-day and 200-day smas this month, presenting a bullish signal that is supported by the bullish RSI and fairly stable volumes. EUR121 has acted as a post-pandemic ceiling on two occasions and this is the key level it needs to breach in order to target a return to levels last seen before the Covid-19 crisis started to cause chaos in financial markets in early 2020. This would be significant as it opens the door first to EUR127 and then EUR132.

The convergence of the three moving averages around the EUR112 mark should provide a floor for the stock going forward but any move below the 200-day sma will open the door to the EUR106 hit late last month.

Airbus shares struggle to break past the ceiling of EUR121

 

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