Airbus stock jumps on share buyback, 2029 profit target: why analysts see upside

Airbus shares surged more than 7% on Wednesday after the European aerospace giant unveiled a €5 billion ($5.7 billion) share buyback programme and laid out ambitious medium-term financial targets, reinforcing investor confidence that easing supply-chain constraints and sustained demand for commercial and military aircraft will drive the company's next phase of growth.

The announcement came alongside a new profitability roadmap under which Airbus expects adjusted earnings before interest and taxes (EBIT), its preferred gauge of profitability, to rise to between €12 billion and €13 billion by 2029, almost double last year's €7.13 billion and well ahead of its existing 2026 target of €7.5 billion.

The upbeat outlook boosted the Paris-listed stock as it has risen only about 5% so far this year, weighed down previously by supply-chain disruptions.

Buyback and higher profit targets impress investors

The €5 billion buyback programme emerged as one of the biggest positives for investors, signalling management's confidence in Airbus' long-term cash generation.

"The positive surprise, however, came from the €5 (billion) three-year share buy-back," Deutsche Bank analyst Christophe Menard said in a note to investors.

JP Morgan also welcomed the announcement, saying Airbus had delivered on the key factors investors had been looking for to support a rally in the shares.

The brokerage noted that while some shareholders may have hoped for a larger repurchase programme, the buyback still sends a strong signal that management remains committed to shareholder returns and could consider further capital distributions in the future.

Airbus said its commercial aircraft division alone is expected to generate around €10 billion in operating profit by 2029 as global airline demand continues to support production growth.

Deliveries recover as supply-chain pressures ease

The company's improved outlook comes after a difficult start to the year caused by engine shortages and broader supply-chain bottlenecks.

Since then, deliveries have accelerated significantly.

Airbus handed over 351 commercial aircraft during the first six months of the year, representing a 15% increase from the same period a year earlier.

The manufacturer maintained its guidance to deliver around 870 commercial aircraft in 2026, implying roughly 10% growth from the previous year.

Chief Executive Guillaume Faury said supply-chain conditions have improved considerably, although challenges remain.

"We have the supply chain in a much better place. We're still having issues here and there that will probably continue as we continue to go higher, but it's in a much better place in the years going out of COVID," Faury told reporters.

The company also reaffirmed its long-term production plans, targeting monthly output of 70 to 75 A320-family aircraft by the end of next year, 13 A220 aircraft per month by 2028, five A330 aircraft per month in 2029 and 12 A350 wide-body jets per month by 2028.

Analysts see room for further upside

Several brokerages argued Airbus' new financial targets could still prove conservative.

Jefferies and Citi analysts said continued strength in wide-body aircraft demand and improving prospects for the defence and space business, supported in part by higher German defence spending, could provide additional earnings upside beyond current forecasts.

Jefferies added that although Airbus' latest update was encouraging, investors would still like to see supply-chain improvements translate into a more meaningful acceleration in production.

Barclays also reiterated its positive stance on the stock on Wednesday.

Analyst Milene Kerner maintained a Buy rating with a €220 price target, above the current trading level of around €208.

Earlier this month, Goldman Sachs raised its 12-month target price to €240 from €230, citing expectations for a recovery in commercial aircraft deliveries as bottlenecks affecting A320 fuselage panels ease.

The brokerage also pointed to delayed deliveries to Chinese customers from the first quarter that are expected to support stronger second-quarter performance.

According to market data, Airbus currently carries a Strong Buy consensus among analysts, with an average price target implying further upside from current levels.

The combination of improving aircraft deliveries, easing supply-chain constraints, higher shareholder returns and ambitious long-term earnings targets appears to have reassured investors that Airbus remains well positioned to capitalise on robust demand across both the commercial aviation and defence sectors.