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Thales HO

Morningstar Rating
€136.85 −1.90 (1.37%)
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Company Report

Thales: Increasing Fair Value Estimate on Favorable Outlook and Wide Moat Upgrade

Thales' business is well diversified with 48% of revenue coming from civil and 52% from defense. Escalating global security concerns, intensified by the Ukraine conflict, are driving structurally higher growth in the defense market. We anticipate this growth will be uninterrupted for at least several years, considering that many countries, particularly in Europe, have underspent since the end of the Cold War. Thales group is strategically positioned to benefit, given its significant stakes in a broad array of major international defense projects. Thales derives approximately 68% of its defense revenue from Europe, and we expect the collective defense budget there to increase by almost 35% in the next five years.

Price vs Fair Value

HO is trading at a 11% discount.
Price
€138.75
Fair Value
€218.00
Uncertainty
Medium
1-Star Price
€545.30
5-Star Price
€792.70
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Expectations for higher defense budgets in Europe over the medium term will benefit Thales' core defense-related sales.

Bears

Global supply chain bottlenecks and rising inflation could affect the group's delivery schedules and weigh on margins in the short term.

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News

Trading Information

Previous Close Price
€138.75
Day Range
€136.00139.10
52-Week Range
€126.45145.70
Bid/Ask
€136.10 / €137.75
Market Cap
€28.26 Bil
Volume/Avg
254,221 / 247,486

Key Statistics

Price/Earnings (Normalized)
18.41
Price/Sales
1.61
Dividend Yield (Trailing)
2.19%
Dividend Yield (Forward)
2.19%
Total Yield
3.73%

Company Profile

Thales is a French aerospace and defense industrial and one of Europe’s largest defense contractors with EUR 18 billion in sales. The company has three reportable segments: 1) Defense & security provides sensors, mission systems, communications, and control systems to European and export defense customers; 2) Aerospace sells avionics and satellites to the civil, defense, and governmental markets; and 3) Digital identity and security provides biometric, data & identity security solutions, payments services, and the manufacturing of SIM cards.
Sector
Industrials
Industry
Aerospace & Defense
Stock Style Box
Large Core
Total Number of Employees
85,253

Competitors

Valuation

Metric
HO
BA.
GD
Price/Earnings (Normalized)
18.4119.9822.39
Price/Book Value
4.043.533.46
Price/Sales
1.611.701.76
Price/Cash Flow
13.5216.2118.21
Price/Earnings
HO
BA.
GD

Financial Strength

Metric
HO
BA.
GD
Quick Ratio
0.640.970.79
Current Ratio
1.011.071.44
Interest Coverage
10.509.1210.84
Quick Ratio
HO
BA.
GD

Profitability

Metric
HO
BA.
GD
Return on Assets (Normalized)
3.98%6.04%6.55%
Return on Equity (Normalized)
18.72%16.84%17.61%
Return on Invested Capital (Normalized)
10.77%11.43%12.01%
Return on Assets
HO
BA.
GD
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