AM: European Defense Rearmament Will Sustain Momentum Despite Civil Aviation Risks

Analysts have raised their price target for Dassault Aviation société anonyme to €325 from €324. This reflects modest upward adjustments to profit margin forecasts and fair value, despite sector concerns around civil ramp dynamics and overall selective sentiment toward high valuations.

Analyst Commentary

Recent analyst coverage of Dassault Aviation société anonyme highlights a mix of optimism and caution regarding the stock's valuation, sector trends, and growth prospects.

• Some analysts have raised their price targets, reflecting higher confidence in the company’s long-term profitability and fair value.
• There is recognition of robust demand in the defense sector, given the ongoing rearmament cycle in Europe. This is supportive of Dassault Aviation’s order book and revenue outlook.
• The company's ability to maintain solid profit margins amid sector-wide challenges has been noted as a strength. This supports upward adjustments in valuation estimates.
• Analysts who are neutral or constructive on the sector believe Dassault’s competitive positioning and sustained execution could justify incremental upside potential.

• Caution is expressed over the company’s high stock valuation. Some analysts advise a selective approach to investment in light of elevated multiples.
• Concerns around civil ramp-up execution persist, with uncertainty regarding the pace and consistency of delivery increases in civil aviation.
• Some believe that despite favorable sector dynamics, these positives may already be reflected in the current share price, limiting further near-term upside.
• The Sell rating from a major U.S. bank underscores skepticism about whether the sector’s rearmament-driven growth can sustain recent valuation gains without further fundamental progress.

What's in the News

• Dassault Aviation expressed gratitude to the Ukrainian and French authorities following the declaration of intent to acquire the Rafale fighter jet. The announcement highlights continued international interest in the company's flagship aircraft (Client Announcements).
• The company marked the completion of the 300th Rafale, emphasizing its operational and commercial success. A total of 533 Rafale aircraft have received firm orders from France and eight export countries, with production rates set to increase to four aircraft per month (Client Announcements).
• On September 26, 2025, France's Defense Procurement and Technology Agency ordered five additional Falcon 2000 Albatros aircraft as part of the AVSIMAR program. This brings the total order to twelve. The Falcon 2000 Albatros, based on the Falcon 2000LXS, is equipped with advanced surveillance systems for maritime missions (Client Announcements).

Valuation Changes

• Fair Value: Increased slightly from €324.07 to €325.06, reflecting a modest upward adjustment in company valuation.
• Discount Rate: Decreased marginally from 6.79% to 6.78%, suggesting a minor reduction in perceived risk.
• Revenue Growth: Declined slightly from 16.32% to 16.06%, indicating tempered growth expectations.
• Net Profit Margin: Improved from 14.66% to 14.83%, signaling stronger profitability projections.
• Future P/E: Edged down from 19.84x to 19.79x, showing a minor decrease in expected price-to-earnings multiples.