Safran (ENXTPA:SAF) Valuation Spotlight as 100% Sustainable Aviation Fuel Milestone Nears

Safran (ENXTPA:SAF) is making headlines as it partners with Bell to complete over 700 hours of flight tests using Sustainable Aviation Fuel in the Bell 505. The company’s helicopter engines will soon be able to operate on 100% SAF, which signals a clear move toward greater sustainability in the industry.

See our latest analysis for Safran.

As Safran pushes deeper into sustainable aviation tech, investors have taken notice, with its share price climbing more than 34% year-to-date, backed by a robust 34% total shareholder return over the past year. The long-term momentum is just as impressive, with a three-year total return topping 150%, suggesting that optimism is building around Safran’s ability to navigate new industry challenges and opportunities.

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With the stock up strongly this year and trading just below analyst targets, is Safran undervalued given its innovation in sustainable aviation, or is the market already factoring in its future growth potential?

Most Popular Narrative: 12% Undervalued

Safran’s widely followed narrative points to a fair value above its last close price, reflecting strategic optimism about future growth and margin resilience. With analysts factoring in upcoming catalysts and robust sector tailwinds, the current share price appears to lag their broader outlook.

The recent acquisition of Collins' actuation and flight control assets, along with other targeted acquisitions and strategic partnerships, will broaden Safran's mission-critical offering, drive cost synergies through 2028, and further diversify revenue streams. This is expected to result in higher EBIT margins and more stable earnings.

Read the complete narrative.

Want to know which bold strategy shifts are behind this valuation? The forecast depends on major boosts to free cash flow, new tech bets, and a game-changing margin play. Discover how all the pieces fit together in the full breakdown and see which financial projections hold the key.

Result: Fair Value of €328.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing supply chain pressures and significant integration challenges from recent acquisitions could still threaten Safran’s projected earnings momentum and valuation upside.

Find out about the key risks to this Safran narrative.

Another View: Multiple Approach Challenges the Outlook

Taking a look through the lens of the price-to-earnings ratio, Safran appears well-priced compared to both its direct peers and the industry average. However, it trades above its fair ratio (27.9x vs 27x). This small premium suggests there could be less upside left than the growth narrative implies. Is the current optimism already priced in, or is there still room for a surprise?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Safran Narrative

If you’d rather dig into the numbers yourself or believe there’s a different story waiting to be told, you can craft your own in just minutes: Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Safran.

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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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