Thales offre encore un potentiel significatif de hausse aux investisseurs, après l’envolée du cours de Bourse de la semaine dernière, si l’on en croit les analystes de Deutsche Bank. Ces derniers ont relevé leur avis sur le titre de « conserver » à « achat », et ont fixé un objectif de 37 euros par action.
Le coeur de l’argumentaire repose sur le plan d’économies Probasis, que le nouveau patron de Thales, Jean-Bernard Lévy entend bien poursuivre. « Etant donné l’environnement difficile pour les dépenses militaires, nous sommes encouragés par le fait que toute la croissance du résultat opérationnel de Thales proviendra des mesures d’économies réalisées en interne », observent Milene Kerner et Benjamin Filder:
« Rewards now outweigh risks; upgrading from Hold to Buy
FY12 results were positive, highlighting the further good operational progress as a result of Probasis. Although our cautious outlook on the French defence budget is unchanged, we believe these are now more than priced in for Thales. Stress testing forecasts suggest valuation upside in almost all scenarios. We raise our EPS forecasts 8-10% and our target price to E37 from E30. We upgrade from Hold to Buy.
Earnings growth fundamentals are improving, cash flow impressed
Following two years of low contribution from Probasis plan savings, Thales started to see strong EBIT growth (EBIT rose 15% organically to E927m in 2012) driven by the acceleration in the rate of Probasis savings. Incremental savings in 2012 were E99m, coming E49m ahead the company’s original planned E50m. Cash flow was impressive – with FCF 41% ahead of expectation at E669m (boosted by c.E250m customer advance inflow in Q4). Management positive on EBIT outlook despite top line caution
Management guidance for 2013 is encouraging. Despite a cautious view on top line (expecting zero growth), Thales expects to deliver +50bps margin expansion in 2013. Management confirmed the target set under the old CEO of an incremental E100m in 2013, taking total cumulative savings to E259m by the end of 2013. Given the difficult backdrop in defence spending, we are encouraged that all of the expected EBIT growth at Thales will be from internal self-help actions. With E200m cumulative net savings to be delivered in 2013 and 2014, allied to the end of most of the problem contracts by 2014 which have carried zero gross margin, EBIT margins should expand c.150bps from the current 6.5% EBIT margin delivered in 2012. This should drive 11% EPS CAGR over 2013-14. Driven by this, Thales is the cheapest A&D stock in Europe – trading on just 7.9x PE by 2014 while offering a 16% FCF yield.
Increasing target price from E30 to E37, upgrading to Buy
Although we remain cautious near term on the French budget outlook, we assume 5% organic sales decline for Thales’ French defence activities, with EPS growth driven by the acceleration in the rate of Probasis savings. The risk:reward balance in Thales is now looking appealing; we upgrade from Hold to Buy. Stress testing forecasts suggests valuation upside in almost all scenarios. Even factoring 15% organic sales decline for French defence activities and a complete failure of Probasis in 2013-14, Thales would still trade on 8.9x 2014E PER and still offer a 14% FCF yield. Driven by our 8-10% EPS forecast increase and the better net cash position, we increase our SOTP/cycle-earnings target price target price to E37 from E30. Key risks: defence budgets, Probasis execution failure. »