Airbus maintained at Buy; €5bn buyback and post-2029 growth path support target price increase

Overview

This report is Deutsche Bank's company update on Airbus. Its core conclusion is that the company confirmed its 2026 guidance and issued 2029 mid-term targets, broadly in line with market expectations; more importantly, the company announced a three-year €5bn share buyback. Together with the long-term growth paths for widebody aircraft, Services, Defence & Space and Helicopters, this supports maintaining the Buy rating and raising the target price.

Core views

The report believes Airbus's investment case is driven not only by deliveries and profit growth through 2029, but also by continued growth potential beyond 2029. In commercial aircraft, widebody ramp-up, A350 profitability entering a mature phase, potential stretched versions of the A220 and A350, improved delivery cadence and higher aftermarket Services revenue form the long-term growth drivers. Defence & Space and Helicopters are continuing their previous growth trajectories: Space is supported by constellation and military space demand, Defence by capacity expansion, MRTT and Eurofighter, and Helicopters by approximately 6% CAGR in military activities and approximately 4% growth in civil activities.

Analysis framework

The report compares the company's disclosed 2029 mid-term guidance with Bloomberg consensus, Deutsche Bank's model and segment-level growth paths. It also incorporates the Q2-26 preview, the impact of the buyback on the share count, segment valuation, DCF and FCF yield methodologies to update the target price.

Methodology notes

• Valuation methodsEV/EBIT SOTP

  Sum-of-the-parts valuation

  The report uses a 2028E EV/EBIT SOTP approach, valuing Airbus Commercial at 20x 2028 EV/EBIT and Defence, Space and Helicopters at a three-year forward peer multiple of 15.3x, resulting in €290 per share.

• Valuation methodsDCF

  Discounted cash flow

  The report assesses long-term cash flow value using a DCF methodology, with the result raised from €190 to €197 per share.

• Valuation methodsFCF Yield

  Free cash flow yield

  The report uses a 4% FCF yield methodology based on 2028E, resulting in a valuation of €208 per share, raised from €202 previously.

• Operating analysisGuidance versus consensus

  Comparison of guidance with market expectations

  The report compares the company's 2029 adjusted EBIT guidance of €12-13bn with the Bloomberg consensus of €13bn, viewing the mid-term guidance as broadly in line with expectations, with the main upside surprise coming from the buyback plan.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Airbus AIR.PA

  Covered company in this report; Deutsche Bank assigns a Buy rating

  Strengths

  Strong demand and high visibility support the 2029 guidance; the €5bn buyback enhances shareholder returns; widebody aircraft, Services, Defence & Space and Helicopters all have growth momentum.

  Weaknesses

  Mid-term EBIT guidance is broadly close to consensus, with the main operational upside surprise not coming from the earnings guidance itself; some growth remains dependent on production ramp-up, engine availability and supply-chain improvement.

  Comparison

  The report values Airbus Commercial at 20x 2028E EV/EBIT, below Boeing's level of more than 22x; Defence, Space and Helicopters are valued at a three-year forward peer multiple of 15.3x.

  Risks

  Headwinds from currency hedging, increased R&D, Spirit integration costs, inventory accumulation, cabin supply bottlenecks, uncertainty over an FCAS alternative, as well as macroeconomic, interest-rate, foreign-exchange and market-volatility risks.

Key data

• RatingBuyDeutsche Bank maintains its Buy rating.
• Target price€232.00Raised from €226 to €232, mainly reflecting the impact of the buyback on the share count.
• Current price€194.60Price as of July 21, 2026.
• 2029 adjusted EBIT guidance€12-13bnThe Bloomberg consensus is €13bn.
• Share buyback€5bnPlanned over three years; the report assumes €800m in 2026, €1.6bn in 2027, €1.6bn in 2028 and €1bn in 2029.
• Shareholder return policyApproximately 60% of FCFIncludes a 30%-50% dividend payout ratio and the new buyback plan.
• A350 production target12 aircraft per month in 2028; the report believes 14-16 aircraft is achievableThe main bottleneck is currently on the cabin side.
• Services revenue target€10bn in 2030The target is to double Services revenue between 2025 and 2030 through organic growth and M&A.
• Q2-26 revenue estimate€20.074bn25% year-on-year growth.
• Q2-26 adjusted EBIT estimate€2.178bnAdjusted EBIT margin of 10.8%.
• Q2-26 adjusted EPS estimate€2.0437% year-on-year growth.

Impact & implications

For investors, the report emphasizes that Airbus's current share price does not yet fully reflect the long-term growth potential of the buyback, widebody aircraft and Services businesses. The target price increase is modest, but the buyback reinforces shareholder-return visibility. If delivery ramp-up, A350 profitability maturation, Services margin expansion and Defence & Space growth are delivered as planned, the valuation remains supported.

Risks

• There is an approximately €150m FX hedging headwind in Q2, caused by a four-cent appreciation in the hedging rate.
• Higher R&D investment, Spirit integration costs and delivery cadence could weigh on short-term operating leverage.
• Widebody production increases remain affected by supply-chain bottlenecks, including cabins.
• Uncertainty remains over how Airbus will replace FCAS in its Defence business.
• The report discloses potential conflicts of interest between Deutsche Bank and the company, including investment-banking, market-making or liquidity-provision activities.
• The target price and forecasts depend on analyst judgments; changes in market conditions, macroeconomics, foreign exchange and valuation multiples may cause actual returns to diverge.

What to watch

• Q2 results release after market close on July 29, 2026.
• The subsequent delivery path for the 2029 adjusted EBIT target of €12-13bn.
• The actual execution pace of the €5bn buyback and its impact on the share count.
• Whether A350 production increases from 12 aircraft per month in 2028 to 14-16 aircraft.
• Whether Services revenue reaches €10bn in 2030 and achieves a double-digit margin.
• Progress in Space, MRTT, Eurofighter production capacity and the FCAS alternative within Defence & Space.
• Whether delivery cadence becomes more balanced after 2028-2029 and whether inventory and supply-chain conditions improve.