How Recent Order Wins and a 36% Stock Rally Affect Airbus Valuation in 2025

If you are watching Airbus and thinking about your next move, you are definitely not alone. Whether you already own shares or are considering a position, the past year has offered a lot to ponder. Airbus stock climbed an impressive 36% over the last twelve months, significantly outpacing the broader market.

For the more patient investors, the five-year return sits at a remarkable 173%. This kind of price movement can leave even seasoned investors wondering whether now is a moment to buy, hold, or take profits. Much of this momentum is rooted in strong fundamentals. Airbus continues to generate solid revenue growth and even stronger bottom-line expansion. The company’s annual revenue and net income growth rates, at 10.6% and 15.5% respectively, speak to its operational strength.

Some intrinsic valuation models estimate a nearly 60% discount to fair value, and several indicators point to potentially attractive value. In fact, according to six major fairness checks, Airbus scores a 5 out of 6 for being undervalued. But stock price alone does not tell the full story, and even value indicators can sometimes miss the mark. Next, this article examines the major valuation approaches typically used to assess a company like Airbus, before exploring what could be the most insightful view of value yet.

Airbus delivered 36.0% returns over the last year. See how this stacks up to the rest of the Aerospace & Defense industry.

Approach 1: Airbus Cash Flows

A Discounted Cash Flow (DCF) model estimates what a company is really worth by projecting its future cash flows and discounting them back to today’s value. This method gives investors a grounded sense of value based on fundamentals, rather than market mood swings.

For Airbus, the latest twelve months of Free Cash Flow came in at €2.72 billion. Analyses suggest strong growth ahead, with expectations that annual free cash flow could reach €20.5 billion by 2035. Using these projections, the DCF model calculates an estimated intrinsic value of €458.01 per share.

This value suggests that Airbus stock is 59.8% undervalued at current market prices. In other words, if the cash flow forecasts are realized, there could be substantial upside for long-term investors.

Result: UNDERVALUED

Our DCF analysis suggests Airbus is undervalued by 59.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on DCF analysis.

Approach 2: Airbus Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is a key tool for valuing profitable companies like Airbus because it links the company’s current share price directly to its earnings power. For investors, the PE ratio provides a quick snapshot of how much the market is willing to pay for each euro of net income generated by the company.

Growth expectations and perceived risk are major influences on what counts as a “normal” or “fair” PE ratio. Companies expected to grow earnings faster, or those seen as lower risk within their sector, tend to command higher PE multiples from investors.

Currently, Airbus trades at a PE ratio of 29.56x. This is considerably lower than the industry average PE of 44.94x and the average for its direct peers at 45.10x. Simply Wall St's proprietary Fair Ratio for Airbus is 33.17x. This number reflects factors such as the company's earnings growth, profitability, industry conditions, and risk profile.

When comparing the Fair Ratio to Airbus’s actual PE, the stock appears undervalued on this metric. The current PE is below the Fair Ratio by a noticeable margin, suggesting there could be room for the valuation to rise if earnings expectations remain steady.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Airbus Narrative

Investing is not just about crunching numbers, it is also about understanding and interpreting the story behind those numbers. This is your Narrative. A Narrative is a simple yet powerful way for you to outline your perspective on a company, connecting Airbus’s business story and future potential to a concrete financial forecast and a fair value estimate.

Within the Simply Wall St platform and its community of millions of investors, Narratives make it easy and accessible for anyone to articulate why they believe Airbus is worth more (or less) than the current market price. By comparing your calculated Fair Value, based on your inputs and assumptions, to the actual share price, you can more confidently decide when to buy, sell, or hold.

What sets Narratives apart is their dynamic nature. As fresh news or earnings results emerge, your Narrative automatically updates, ensuring your analysis is always current. For example, some Airbus investors may see the company’s innovations and industry growth leading to a fair value around €244 per share, while others, more cautious about supply chain risks, might place fair value at just €140.

Do you think there's more to the story for Airbus? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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