SAF: Upgraded Outlook And UK Expansion Will Shape Balanced Risk Reward Outlook

Analysts have raised their price target on Safran to approximately EUR 268 from about EUR 232, citing stronger than expected revenue growth, modestly improved profit margins, and a higher justified future earnings multiple supported by recent upward target revisions from major brokerages.

Analyst Commentary

Recent commentary from major Wall Street firms has reinforced a broadly constructive view on Safran, with upward price target revisions reflecting confidence in sustained earnings growth and cash generation. JPMorgan lifted its target to EUR 350 while maintaining an Overweight stance, highlighting ongoing strength in the company’s core franchises. Goldman Sachs initiated coverage with a Buy rating and a EUR 340 target, underscoring the favorable backdrop in the European aerospace market and the attractive positioning of Safran in the engine aftermarket.

Jefferies, which raised its target to EUR 360, emphasized that the company’s modest upward adjustment to 2025 guidance understated the degree of underlying earnings momentum. The broker pointed to an implied EUR 200 to EUR 250 million EBIT upgrade, driven by robust profit generation and revenue growth, as evidence that Safran’s operational performance is tracking ahead of prior expectations even as the share price reaction remains relatively muted.

Across the Street, the consensus narrative points to improving visibility on travel demand, tightening supply in the aerospace ecosystem, and potential for meaningful near term capital returns. These factors are seen as supporting not only higher earnings but also a higher valuation multiple, particularly if Safran continues to execute on aftermarket expansion and margin initiatives while maintaining disciplined capital allocation.

At the same time, the measured share price response to recent guidance changes suggests that much of the good news may already be reflected in current valuations. While top tier firms such as JPMorgan and Goldman Sachs remain positive, there are early signs that some market participants are becoming more selective, focusing closely on the balance between upgraded profit expectations and the risk that macro or policy headwinds could limit further multiple expansion.

Bearish Takeaways

• Bearish analysts highlight that the muted share reaction to Safran’s upgraded 2025 guidance suggests upside may be constrained as valuation already discounts a substantial portion of forecast earnings growth.
• There is concern that the relatively modest headline increase in guidance, compared with the implied EBIT uplift, could signal execution risk if underlying margin improvement proves difficult to sustain in a more volatile macro environment.
• Some caution that uncertainty around fiscal policy and budget pressures in France could weigh on investor sentiment toward domestically exposed industrial names, limiting the scope for further re rating even if near term results remain solid.
• Bearish analysts also flag that expectations for strong capital returns and aftermarket growth leave limited room for disappointment, meaning any slip in delivery schedules, pricing, or cash conversion could trigger a sharper reassessment of Safran’s premium valuation.

What's in the News

• Safran created Safran Tech UK, its first Research and Technology centre outside France, as a launchpad for the global expansion of its R and T activities and to deepen its UK industrial footprint (company announcement).
• Following the integration of the actuation and flight control businesses acquired from Collins Aerospace in mid 2025, Safran has become the United Kingdom's third largest civil aerospace player, with more than 5,500 employees across 14 sites and annual revenue of about GBP 1.5 billion (company announcement).
• Safran Tech UK will focus on electrification of propulsion and actuation systems and on high performance composite materials, aiming to accelerate aviation decarbonization, which now represents roughly 75 percent of the Group's R and T investment (company announcement).

Valuation Changes

• The fair value estimate has risen meaningfully to approximately €268 from about €232, reflecting a higher intrinsic valuation for Safran shares.
• The discount rate has fallen slightly to around 6.90 percent from roughly 6.98 percent, modestly increasing the present value of forecast cash flows.
• The revenue growth assumption has increased to about 10.6 percent from roughly 9.2 percent, indicating a stronger expected top line trajectory.
• The net profit margin forecast has edged higher to approximately 12.6 percent from about 12.3 percent, signaling a small improvement in expected profitability.
• The future P/E multiple has risen to roughly 27.9x from around 25.6x, implying a higher valuation placed on Safran’s projected earnings stream.