Thales Price Objective Cut as BofA Notes Planned Exail Acquisition
BofA Global Research removed its assumed share buyback for Thales (HO.PA) after announcing its plans to acquire Exail Technologies (EXA.PA), leading to a price objective downgrade from the research firm. "With the deal expected to close towards the end of 2027, we use current Visible Alpha consensus estimates on Exail to provide a pro-forma analysis of the deal for Thales, which we see as low single digit accretive (2-3%) in 2030, assuming interest costs of 4% on the equity component, and assuming no revenue synergies," analysts said in a Wednesday earnings preview note. "Thales clearly remains cash generative, and we remove our assumed buyback following the announcement. De-levering should be quick, with Thales net cash 2029 pro forma." The price objective was reduced to 293 euros from 301 euros, while the buy rating on the stock was maintained. The research firm also updated its financial estimates for the French defense technology group. For the second quarter, BofA expects Thales to see a high-single-digit organic sales growth on the back of continued strength at the company's defense segment and "solid" momentum at its aerospace division.
BofA Global Research removed its assumed share buyback for Thales (HO.PA) after announcing its plans to acquire Exail Technologies (EXA.PA), leading to a price objective downgrade from the research firm. "With the deal expected to close towards the end of 2027, we use current Visible Alpha consensus estimates on Exail to provide a pro-forma analysis of the deal for Thales, which we see as low single digit accretive (2-3%) in 2030, assuming interest costs of 4% on the equity component, and assuming no revenue synergies," analysts said in a Wednesday earnings preview note. "Thales clearly remains cash generative, and we remove our assumed buyback following the announcement.
De-levering should be quick, with Thales net cash 2029 pro forma." The price objective was reduced to 293 euros from 301 euros, while the buy rating on the stock was maintained.
The research firm also updated its financial estimates for the French defense technology group.
For the second quarter, BofA expects Thales to see a high-single-digit organic sales growth on the back of continued strength at the company's defense segment and "solid" momentum at its aerospace division.