Morningstar

Thales Earnings: Q3 2023 Results in Line With Consensus; FVE Maintained

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Securities In This Article
Thales
(HO)

Wide-moat Thales HO reported third-quarter 2023 results aligning with company-compiled consensus. Our fair value estimate is unchanged.

Sales over nine months increased by 4.5% (7.5% organically) compared with the same period of 2022, with civil aerospace driving growth in both OEM and aftermarket thanks to ongoing momentum in avionics orders.

Space was still affected by supply chain tensions. The defense and security business showed resilience with mid-single-digit growth. Digital identity and security, or DIS, demonstrated ongoing strong sales momentum outside of the Smart Cards business. However, compared with third-quarter 2022, sales declined by approximately 1.5% organically, mainly due to an outstanding third-quarter 2022 performance (up 22%).

Although the total order intake at the end of September was down by 18% versus high comps from the jumbo Rafale UAE contract booked in second-quarter 2022, management maintained full-year targets, reflecting the strong momentum of the commercial activity. Small and medium orders also continued to progress, with small orders up 8% organically.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Loredana Muharremi, CFA

Equity Analyst
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Loredana Muharremi, CFA, is an equity analyst, in the European equity research team, for Morningstar*. She covers European aerospace and defence companies.

Before joining Morningstar in 2023, Muharremi served as a strategy consultant for the Italian financial institutions sector at Bain Italy. Prior to her tenure at Bain, she held various roles at BNY Mellon in New York, ranging from credit risk analyst to positions in compliance and financial regulatory reporting.

Muharremi holds a bachelor’s degree in business administration and management from Bocconi university. She also holds an MBA with specialization in finance from SDA Bocconi and a master’s in finance from Bocconi university. She has also completed all three levels of the CFA.

* Morningstar Holland BV (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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