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Thales
(HO)
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Rating:70Outperform
Price Target:
€294.00
▲(17.60% Upside)
Action:Reiterated
Date:07/23/26
Overall score reflects strong fundamentals and a very positive, guidance-upgraded earnings call (order momentum, improving margins, exceptional H1 cash generation and lower net debt). These positives are tempered by a weaker technical trend (below key moving averages with negative MACD) and a relatively rich valuation (P/E ~27.8 with modest yield), which limit near-term upside if execution or cash timing normalizes.
Positive Factors
Strong order momentum
Order intake materially exceeded sales, creating coverage for future revenue and demonstrating strong demand for Thales's mission-critical systems. Defence-led bookings and an upgraded full-year book-to-bill target support durable program visibility over the coming quarters.
Negative Factors
Cyber and Digital profitability pressure
Profitability pressure in Cyber & Digital shows that growth in security and identity markets is not uniform across products. Weakness in digital identity and payments could weigh on group margins if pricing, volumes, or issuance trends remain difficult over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong order momentum
Order intake materially exceeded sales, creating coverage for future revenue and demonstrating strong demand for Thales's mission-critical systems. Defence-led bookings and an upgraded full-year book-to-bill target support durable program visibility over the coming quarters.
Read all positive factors
Thales (HO) vs. iShares MSCI France ETF (EWQ)
Market Cap
€47.29B
Dividend Yield1.7%
Average Volume (3M)258.61K
Price to Earnings (P/E)31.6
Beta (1Y)0.97
Revenue Growth6.89%
EPS Growth118.90%
CountryFR
Employees82,111
SectorGeneral
Sector StrengthN/A
IndustryAerospace & Defense
Share Statistics
EPS (TTM)7.28
Shares Outstanding205,941,910
10 Day Avg. Volume226,827
30 Day Avg. Volume258,611
Financial Highlights & Ratios
PEG Ratio1.57
Price to Book (P/B)5.93
Price to Sales (P/S)2.13
P/FCF Ratio17.92
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€294.50Price Target Upside17.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)10.76
Revenue Forecast (FY)€23.81B
Thales Business Overview & Revenue Model
Company Description
Thales S.A. provides various solutions in the defence and security, aerospace and space, and digital identity and security markets worldwide. The company offers advance air defence systems, combat systems, defence onboard electronics c4isr solutio...
How the Company Makes Money
Thales primarily makes money by selling complex hardware, software, and integrated systems, and then earning recurring revenue from long-term services that keep those systems operational. Key revenue streams include: (1) Program and product sales:...
Thales Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 09, 2027
Earnings Call Sentiment Positive
The call presents a strongly positive commercial and financial performance in H1 2026: robust order intake (+22% org), solid underlying sales growth (~9.6% excluding one‑offs), margin expansion (group adj. EBIT margin 12.5%), exceptional free cash flow (~EUR 1.8–1.9bn) and a substantial reduction in net debt (to ~EUR 500m). Defence and Aerospace outperformed materially, and management upgraded key guidance (book‑to‑bill and cash conversion), while continuing to invest in R&D and strategic M&A (Exail). Principal negatives are concentrated in Cyber & Digital (profitability pressures in Digital Identity and Payments) and a one‑off satellite cancellation (-EUR 153m sales). Given the scale and materiality of the positive metrics and guidance upgrades versus the limited number of specific headwinds, the overall tone is clearly positive.Positive Updates
Strong Order Intake and Book-to-Bill
Order intake reached EUR 12.5 billion in H1 2026, up 22% organically year‑on‑year, with a book‑to‑bill ratio of 1.14 (above 1), driven mainly by Defence & Space (18 large orders > EUR 100m, 13 in Defence).
Negative Updates
Cancellation of 2 Geostationary Satellites (One‑Off Sales Hit)
Thales was notified of the cancellation of 2 telco satellites based on the Space INSPIRE platform, reducing H1 sales by EUR 153 million and lowering reported Space revenue in the semester.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Order Intake and Book-to-Bill
Order intake reached EUR 12.5 billion in H1 2026, up 22% organically year‑on‑year, with a book‑to‑bill ratio of 1.14 (above 1), driven mainly by Defence & Space (18 large orders > EUR 100m, 13 in Defence).
Read all positive updates
Company Guidance
Thales confirmed and upgraded its 2026 guidance: book-to-bill now expected above 1.1 and the conversion of adjusted net income into free operating cash flow upgraded to 100–110% for the year; management reconfirmed organic sales growth of 6–7% (full‑year sales of €23.3–23.6bn) and an adjusted EBIT margin target of 12.6–12.8%. They reiterated CapEx around €850m for 2026 and flagged an additional temporary French corporate tax of ~€100m (H1 effective tax rate 25.8% including this, ~21% ex‑additional tax). The upgrade is supported by exceptional H1 cash generation (FOCF ≈ €1.9bn, ~3x H1 2025) and a mid‑year net debt of ~€519m (≈€3bn reduction vs. June 2025).Thales Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.82B | 22.14B | 20.58B | 18.43B | 17.57B | 16.19B |
| Gross Profit | 6.13B | 5.85B | 5.37B | 4.77B | 4.46B | 4.03B |
| EBITDA | 3.51B | 3.31B | 2.67B | 2.46B | 2.51B | 2.17B |
| Net Income | 1.50B | 1.67B | 1.42B | 1.02B | 1.12B | 1.09B |
Balance Sheet | ||||||
| Total Assets | 40.01B | 39.16B | 39.99B | 38.79B | 34.42B | 32.84B |
| Cash, Cash Equivalents and Short-Term Investments | 5.06B | 4.49B | 4.77B | 4.08B | 5.30B | 5.05B |
| Total Debt | 5.58B | 6.13B | 7.82B | 8.43B | 5.47B | 5.92B |
| Total Liabilities | 31.99B | 31.17B | 32.43B | 31.82B | 27.04B | 26.12B |
| Stockholders Equity | 8.01B | 7.97B | 7.52B | 6.83B | 7.17B | 6.48B |
Cash Flow | ||||||
| Free Cash Flow | 3.97B | 2.63B | 2.01B | 970.80M | 2.56B | 2.26B |
| Operating Cash Flow | 4.69B | 3.32B | 2.64B | 1.60B | 3.06B | 2.71B |
| Investing Cash Flow | -821.50M | -909.80M | -62.80M | -4.23B | -1.21B | -493.40M |
| Financing Cash Flow | -2.75B | -2.66B | -2.00B | 1.59B | -1.77B | -2.17B |
Thales Technical Analysis
Neutral
250.00
Price Trends
236.40
Negative
236.35
Negative
240.56
Negative
Market Momentum
-1.39
Negative
51.27
Neutral
78.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:HO, the sentiment is Neutral. The current price of 250 is above the 20-day moving average (MA) of 225.42, above the 50-day MA of 236.40, and above the 200-day MA of 240.56, indicating a neutral trend. The MACD of -1.39 indicates Negative momentum. The RSI at 51.27 is Neutral, neither overbought nor oversold. The STOCH value of 78.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:HO.
Thales Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | €22.97B | 23.14 | 15.18% | 1.60% | 33.17% | 29.17% | |
78 Outperform | €130.45B | 33.72 | 26.45% | 1.07% | 14.27% | -9.86% | |
73 Outperform | €153.21B | 26.43 | 22.56% | 1.61% | 9.96% | 20.55% | |
70 Outperform | €47.29B | 31.59 | 18.73% | 1.70% | 6.89% | 118.90% | |
64 Neutral | €2.11B | -25.61 | -22.11% | 2.04% | 23.74% | -6131.69% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
41 Neutral | €150.22M | -3.11 | -69.70% | ― | 11.71% | -171.43% |
* General Sector Average
FR:HO
Thales
226.70
-29.38
-11.47%
FR:EXA
Exail Technologies
125.20
42.30
51.03%
FR:AIR
Airbus Group SE
194.78
-8.71
-4.28%
FR:AM
Dassault Aviation
300.60
21.57
7.73%
FR:LAT
Latecoere
0.01
>-0.01
-15.38%
FR:SAF
SAFRAN SA
302.00
-2.38
-0.78%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.