(Finance) – The analysts remain positive on the title Avioa company listed on Euronext STAR Milan and active in the construction and development of space launchers and propulsion systems, seeing a good visibility on guidance and looking at the Vega C Return to Flight expected by 4Q24, pending the development of the tactical propulsion business in the USA (potentially relevant, but the benefits of which are diluted in the long term).
Intermontewhich has an “Outperform” recommendation and a target price of 14 euros per share, says the company has reported 2Q results substantially in line with previous yearwith a slight increase in turnover year-on-year (+4% to 101.8 million euros) thanks to the growth of development activity and production activity for the Tactical Propulsion business and an Adj. EBITDA of 7.2 million euros (7.8 million euros in 2Q23).
It is highlighted that the main focus of the conference call it was on recent partnerships signed in the United States. Although the details provided are limited due to confidentiality agreements, management’s comments are consistent with initial expectations in terms of timing: it was made clear that, while the company will strive to compress the development time as much as possible, taking advantage of the experience gained over the years, it is difficult to imagine that full production could be achieved before 3 or 4 years (CAMM-ER took more or less 5 years).
“We confirm our positive view on the stock based on the expectation of a gradual and constant improvement of the numbers and a continuation of the strong order intake momentum, particularly in tactical propulsion, whose growing importance should reduce the dependence on launch activity, which can prove irregular as seen in the recent past – Intermonte’s research reads – The first major milestone of the year was achieved with the successful maiden flight of Ariane 6. The next key step will now be the resumption of Vega C flights, scheduled for 4Q24, which is key to unlocking the company’s full potential and enabling the execution of the substantial order book”.
Equitywhich has a “Hold” recommendation and a target price of 12.3 euros per share, underlines that the lack of operating leverage in 1H24 (against the revenue growth of 14.5% YoY the adj. EBITDA grew by only 1% YoY) is attributable to the product mix that is
predicts better in 2H. In addition, to hit the FY24 order intake guidance, orders of 300-350 million euros are needed in 2H related to the development of the Vega C and tactical propulsion. On the US front, the broker reports that the product qualification process is for Raytheon that the US Army requires 3-4 years to get to full speed production.
The call also revealed that there is no no involvement of Avio in the discussions in progress between Leonardo And Thales in order to broaden their industrial collaboration and perhaps the scope of shared activities in Space (currently satellite production and satellite services management).