On Friday, Barclays reiterated its 'weighted in line' recommendation on Thales, while lowering its target price for the stock from €154 to €148.
In a research note, the research firm justifies its decision by the series of acquisitions recently completed by the French group, from Tesserent (cybersecurity) to AeroComms (cockpit communications systems).
Barclays estimates that this buying frenzy will result in an increase in the company's net debt, from 781 million euros in June 2023 to 1.8 billion euros by the end of 2024.
While appreciating the strategic significance of the Imperva acquisition, which will enable the company to strengthen its expertise in civil cybersecurity, the intermediary also notes that the operation will be costly.
Pending finalization of the transaction, scheduled for early 2024, it is the Digital Identity and Security (DIS) branch that should determine Thales's performance in 2023, Barclays points out, although it cites 'limited visibility' at this stage on the division's dynamism.
From a more general point of view, the analyst acknowledges that the Group is 'defensively positioned', but that its nature is also more cyclical than that of its peers.
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Thales is one of the European leaders in manufacturing and marketing of electronic equipment and systems for the defense and security, aerospace, and transportation sectors. Net sales break down by product group as follows:
- defense and security systems (53.4%): C4I defense and security systems (control and monitoring systems, communication, protection, cyber-security, and other systems), defense mission systems, naval systems, electronic war systems, drones, air operation systems (air defense, air surveillance), ground defense systems and missiles;
- aerospace systems (28.4%): avionics equipment (cockpit, cabin multimedia, and simulation equipment), space systems (satellites, payloads, etc.);
- digital identification and security solutions (18.2%).
Besides, the group owns a 35% stake in Naval Group (manufacture of naval equipment for defense and nuclear energy sectors).
Net sales are distributed geographically as follows: France (29.5%), the United Kingdom (6.6%), Europe (24.8%), the United States and Canada (14%), Asia (9.4%), Near and Middle East (6%), Australia and New Zealand (4.4%) and other (5.3%).
THALES 
