European aircraft maker Airbus (FR:AIR) (EADSY) impressed investors with record orders and strong financials for 2023. Aside from the annual dividend payment of €1.80 per share, the company said it will propose a special dividend of €1.00 per share at the upcoming general meeting in April. Airbus’ solid performance comes at a time when rival Boeing (NYSE:BA) is struggling with quality control issues and disappointing customers with delivery delays following a panel blowout incident on Alaska Airlines 737 Max.
Airbus’ 2023 Performance
Airbus’ 2023 revenue grew 11% to €65.4 billion, with the company delivering 735 commercial aircraft. However, the company’s net income declined 11% to €3.8 billion, partially impacted by a €600 million charge related to the company’s troubled space division.
Airbus’ net orders came in at 2,094 aircraft last year, up 155% from 2022. The company’s order book, as of December 31, 2023, jumped 19% to 8,598 units. Airbus is witnessing strong demand, thanks to a rebound in travel following the slump induced by the pandemic.
Rival Boeing lags Airbus, with net new orders of 1,314 units and aircraft deliveries of 528 units in 2023. While Airbus intends to boost its deliveries, Boeing is easing the production of its 737 Max due to quality concerns following the Alaska Airlines incident. Airbus ended 2023 with a net cash position of €10.7 billion. In contrast, Boeing had a consolidated debt of $52.3 billion at the end of 2023.
Looking ahead, Airbus expects about 800 commercial aircraft deliveries in 2024. Further, it projects adjusted EBIT (earnings before interest and taxes) in the range of €6.5 billion to €7.0 billion, up from €5.8 billion in 2023. The company expects free cash flow (before customer financing) of about €4.0 billion, down from €4.4 billion in 2023.
Are Airbus Shares a Good Buy?
Following the results, some analysts contended that Airbus’ 2024 guidance was conservative. Bernstein analyst George Zhao stated that he expected 800 deliveries as the floor and EBIT guidance of €7 billion. Zhao reiterated a Buy rating on Airbus stock with a price target of €173.
Airbus stock scores a Moderate Buy consensus rating based on 10 Buys, two Holds, and two Sells. The Airbus Group share price target implies 6.4% upside potential. Shares have advanced 19% in the past year.
