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Thales (FR:HO)
:HO
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Thales
(LSE:HO)
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Rating:73Outperform
Price Target:
€263.00
▲(1.43% Upside)
Thales's strong financial performance and positive earnings call are the most significant factors driving the score. However, the high P/E ratio and challenges in certain segments slightly offset these strengths. The technical indicators suggest a neutral trend, contributing to a balanced overall assessment.
Positive Factors
Negative Factors
Thales (HO) vs. iShares MSCI France ETF (EWQ)
Market Cap
€52.67B
Dividend Yield1.43%
Average Volume (3M)266.39K
Price to Earnings (P/E)77.1
Beta (1Y)0.58
Revenue Growth11.16%
EPS Growth-50.57%
CountryFR
Employees78,189
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)4.27
Shares Outstanding205,941,910
10 Day Avg. Volume370,741
30 Day Avg. Volume266,389
Financial Highlights & Ratios
PEG Ratio0.49
Price to Book (P/B)3.79
Price to Sales (P/S)1.38
P/FCF Ratio14.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€259.22Price Target Upside-0.03% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Thales Business Overview & Revenue Model
Company DescriptionThales S.A. provides various solutions for civilian and military customers in the aeronautics, space, defense, security, ground transportation, and digital security markets worldwide. It operates through Aerospace, Transport, Defence & Security, and Digital Identity & Security segments. The company offers communications, command, and control systems; mission services and support; protection and mission/combat systems; surveillance, detection, and intelligence systems; training and simulation solutions for air, land, naval, and joint forces; and digital identity and security solutions. It also provides air traffic management solutions; flight decks and avionics equipment and functions; in-flight entertainment and connectivity systems and services; electrical systems; aerospace training solutions; navigation solutions; support and services for avionics equipment; and vision systems. In addition, the company designs, operates, and delivers satellite-based systems for telecommunications, navigation, earth observation, environmental management, exploration, and science and orbital infrastructures; signaling, communications and supervision, and fare collection management systems and related services; cybersecurity and railway digitalization systems; and main line rail, and urban and intermodal mobility solutions. Further, it provides solutions for various markets and applications, including radiology, radio frequency, microwave sources, training and simulation solutions, lasers, and microelectronics solutions for science, industry, space, defense, automotive, railways, and energy conversion platforms. Thales S.A. has a strategic agreement with Google LLC. The company was formerly known as Thomson-CSF and changed its name to Thales S.A. in 2000. Thales S.A. was founded in 1893 and is headquartered in Courbevoie, France.
How the Company Makes MoneyThales generates revenue through a diversified business model that includes the sale of high-tech products, systems integration services, and ongoing maintenance and support contracts. Key revenue streams come from defense contracts with governments, providing military systems and services; aerospace solutions for commercial airlines and business jets; and security systems for both public and private sectors. Additionally, Thales benefits from long-term partnerships with various governmental and commercial entities, which provide a steady flow of income through multi-year contracts. The company's focus on research and development also enables it to offer cutting-edge solutions, further driving sales and market demand.
Thales Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Feb 26, 2026
Earnings Call Sentiment Positive
The earnings call presented a strong financial performance driven by significant growth in the Defense segment and robust cash flow management. However, challenges remain in the Cyber & Digital segment and Space segment, with integration issues and low demand impacting growth. Overall, the positive aspects outweigh the negatives, especially with strategic investments and acquisitions showing promising results.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Thales achieved an 8.1% increase in organic sales growth, reaching EUR 10.3 billion. Adjusted EBIT recorded a solid 12.7% growth, with a margin of 12.2%.
Defense Segment Success
Defense segment order intake amounted to EUR 5.8 billion, with sales recording a sharp organic growth of 12.7%. The segment is benefiting from the supportive geopolitical context and increased production ramp-up.
Positive Cash Flow Position
The free operational cash flow was particularly strong at EUR 499 million, driven by improved working capital management and customer payments.
Strategic Investments and Acquisitions
Thales is investing EUR 350 million in its Châtellerault site in France and is seeing strong performance from recent acquisitions, including Cobham Aerospace Communications.
Negative Updates
Challenges in Cyber & Digital Segment
The Cyber & Digital segment experienced a 1.9% decline in sales, impacted by integration challenges with Imperva and a refocus on profitable segments.
Space Segment Struggles
Space sales are still impacted by low demand in the Telco business, although there are signs of improvement with recent contract wins.
Increased Net Debt
Net debt increased by EUR 383 million from December 2024 to EUR 3.4 billion, mainly due to seasonal effects like dividend payments.
Company Guidance
During the Thales H1 2025 Results Conference Call, the company provided guidance on its financial performance and strategic priorities. Thales reported a robust 8.1% growth in sales, reaching EUR 10.3 billion, with an adjusted EBIT of EUR 1.2 billion, representing a 12.7% organic growth and a margin increase to 12.2%. The order intake was solid at EUR 10.4 billion, achieving a book-to-bill ratio above 1. The company highlighted a strong performance in Defense, driven by substantial contracts like the GBP 1.16 billion deal with the UK Ministry of Defense and the sale of 26 Rafale jets to the Indian Navy. Thales aims for a book-to-bill ratio above 1 for the full year, with organic growth of 6-7% and an adjusted EBIT margin between 12.2% and 12.4%. The strategic focus includes ramping up production capacity, restoring space profitability, maintaining R&D leadership, and creating value from recent acquisitions. Cash flow generation was notable, with a free operational cash flow of EUR 499 million, while net debt increased by EUR 383 million due to seasonal effects.Thales Financial Statement Overview
Summary
Thales has shown impressive financial performance with strong revenue and profit growth, improved operational efficiency, and excellent cash flow management. The elimination of debt in 2024 significantly strengthened its financial stability, though the high liabilities-to-assets ratio remains a point to watch.Income Statement
Thales has demonstrated strong revenue growth with a notable increase from €18.43 billion in 2023 to €20.58 billion in 2024, marking an 11.65% growth. The gross profit margin remained high at 26.11% for 2024, indicating efficient cost management. The net profit margin improved significantly from 5.55% in 2023 to 6.90% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins also improved, suggesting operational efficiency gains.82
Very Positive
Balance Sheet
Thales's balance sheet is robust with a strong equity position. The debt-to-equity ratio improved significantly, as total debt was eliminated in 2024, reducing financial risk. Return on equity (ROE) improved to 18.89% in 2024, indicating effective use of shareholder funds. However, the equity ratio was 18.80%, suggesting a relatively high level of liabilities compared to assets, which requires monitoring.75
Positive
Cash Flow
Thales exhibited excellent cash flow management with a substantial increase in free cash flow from €0.97 billion in 2023 to €2.01 billion in 2024, a growth of 107.54%. The operating cash flow to net income ratio was strong at 1.86, indicating robust cash generation relative to accounting profits. The free cash flow to net income ratio also improved, reinforcing the company's ability to generate cash.88
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.35B | 20.58B | 18.43B | 17.57B | 16.19B | 16.99B |
| Gross Profit | 5.58B | 5.37B | 4.77B | 4.46B | 4.03B | 3.94B |
| EBITDA | 2.51B | 2.67B | 2.46B | 2.29B | 2.17B | 1.65B |
| Net Income | 683.00M | 1.42B | 1.02B | 1.12B | 1.09B | 483.40M |
Balance Sheet | ||||||
| Total Assets | 38.89B | 39.99B | 38.79B | 34.42B | 32.84B | 31.81B |
| Cash, Cash Equivalents and Short-Term Investments | 3.89B | 4.77B | 4.08B | 5.30B | 5.05B | 5.00B |
| Total Debt | 7.31B | 7.82B | 8.43B | 5.47B | 5.92B | 7.60B |
| Total Liabilities | 31.72B | 32.43B | 31.82B | 27.04B | 26.12B | 26.50B |
| Stockholders Equity | 7.14B | 7.52B | 6.83B | 7.17B | 6.48B | 5.11B |
Cash Flow | ||||||
| Free Cash Flow | 2.54B | 2.01B | 970.80M | 2.56B | 2.26B | 950.20M |
| Operating Cash Flow | 3.16B | 2.64B | 1.60B | 3.06B | 2.71B | 1.35B |
| Investing Cash Flow | -949.20M | -62.80M | -4.23B | -1.21B | -493.40M | -386.40M |
| Financing Cash Flow | -2.25B | -2.00B | 1.59B | -1.77B | -2.17B | 1.20B |
Thales Technical Analysis
Positive
259.30
Price Trends
237.03
Positive
244.34
Positive
219.63
Positive
Market Momentum
6.50
Negative
66.52
Neutral
57.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:HO, the sentiment is Positive. The current price of 259.3 is above the 20-day moving average (MA) of 242.05, above the 50-day MA of 237.03, and above the 200-day MA of 219.63, indicating a bullish trend. The MACD of 6.50 indicates Negative momentum. The RSI at 66.52 is Neutral, neither overbought nor oversold. The STOCH value of 57.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:HO.
Thales Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 154.91B | 31.04 | 21.39% | 1.54% | 5.12% | 59.43% | |
73 Outperform | €52.67B | 77.07 | 14.51% | 1.43% | 11.16% | -50.57% | |
73 Outperform | 22.00B | 28.63 | 14.59% | 1.67% | 29.91% | -2.24% | |
72 Outperform | 2.09B | 33.40 | ― | 0.85% | 9.17% | 12.78% | |
67 Neutral | 123.36B | 28.27 | -6.55% | 0.98% | 14.19% | 161.87% | |
66 Neutral | 1.64B | 1,176.33 | -3.04% | ― | 29.80% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
FR:HO
Thales
259.30
117.14
82.39%
EXALF
Exail Technologies
104.25
84.42
425.72%
EADSF
Airbus Group SE
229.60
84.40
58.13%
GB:0IAX
Dassault Aviation
281.80
93.14
49.37%
GB:0EKE
Lisi SA
45.95
19.53
73.92%
GB:0IU8
SAFRAN SA
296.00
84.07
39.67%
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.