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AVIO: US Solid Rocket Motor Expansion Will Drive Long-Term Upside

Collaborations And Stable Outlook Will Drive Expansion Plans Into Next Year

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AVIO
AnalystConsensusTarget
Not Invested
Published 21 Feb 2025

Update shared on 08 Dec 2025

Fair value Decreased 9.13%
Previous
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AnalystConsensusTarget's Fair Value
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1Y
115.2%
7D
6.3%

Analysts have trimmed their price target on Avio from approximately $48.83 to $44.38 per share, citing slightly softer long term revenue growth and margin expectations, along with a marginally higher discount rate. Together, these factors reduce the stock's assessed fair value.

What's in the News

  • Completed a follow on equity offering of approximately €399.9 million via a rights issue, selling 19.63 million ordinary shares at €20.37 per share (company filing)
  • Signed a Memorandum of Understanding with Raytheon to establish a solid rocket motor facility in the United States, giving Raytheon preferred access to future production capacity (company announcement)
  • Entered into a non binding term sheet with Lockheed Martin to support the planned Avio USA solid rocket motor facility, with Lockheed Martin receiving preferred access to capacity to bolster its supply chain resilience (company announcement)
  • Won a 24 month contract with the European Space Agency to define requirements and technologies for a reusable upper stage demonstration, leveraging Avio's liquid propulsion and re entry expertise (company announcement)
  • Received a purchase order of up to $26 million from Raytheon and Avio USA for continued engineering work on the Mk 104 dual thrust rocket motor, funding progress through Critical Design Review and long lead material procurement (company announcement)

Valuation Changes

  • Fair Value: trimmed from approximately €48.83 to €44.38 per share. This represents a modest downward revision in assessed intrinsic value.
  • Discount Rate: risen slightly from about 9.83 percent to 9.90 percent, reflecting a marginally higher perceived risk profile.
  • Revenue Growth: lowered slightly from around 10.30 percent to 10.09 percent per year, indicating a small reduction in long term growth expectations.
  • Net Profit Margin: reduced modestly from about 2.21 percent to 2.06 percent, implying slightly weaker long term profitability assumptions.
  • Future P/E: eased from roughly 87.39x to 86.01x, indicating a minor compression in the multiple applied to forward earnings.

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Disclaimer

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