Airbus share price slowly forms a risky pattern as it flags engine delivery woes

Airbus share price has done well in the past few months, moving from a low of €124 in April last year to the current €200. Recently, however, it has retreated from last year’s high of €221. So, will this stock continue rising as its Pratt & Whitney challenges continue?

Airbus flags Pratt & Whitney challenges

Airbus, the biggest aircraft manufacturer, is facing major challenges as Pratt & Whitney struggles to deliver its engines. In a statement, the management said that this shortage had made it struggle to meet its delivery targets.

The company now expects that the production of A320 aircraft will reach between 70 and 75 by the end of the year. As a result, it aims to deliver 870 jets to customers this year, higher than the 793 it delivered last year. 

At the same time, the company said that its A220 model will reach 13 a month next year. Also, it expects that the best-selling A320 will stabilize at 75 jets a month next year. 

Still, the challenge is that the delivery targets will depend on the engine deliveries by Pratt & Whitney. As such, there is a risk that it will not achieve its delivery targets this year. Also, the company may face the fuselage issue it experienced last year.

Strong financial results in a difficult market

Airbus delivered relatively strong financial results in a difficult market. It delivery 793 jets, meeting its previous guidance. Also, its backlog continued growing, reaching 8,754, with A320 having a 82% market share. The other popular planes in its backlog are A350, A330 and A220.

The results released today showed that its revenue rose to €73.4 billion last year from the €69.2 billion it made in 2024. Its commercial jet division accounted for 70% of its business, while defense and helicopters accounted for 18% and 12%.

Most importantly, the company’s profits continued growing despite the challenges it experienced. Its adjusted EBIT jumped to €7.1 billion from the previous €5.4 billion.

Airbus is benefiting from the ongoing higher deliveries and its service revenue. At the same time, demand for its helicopters continues rising, with the revenue rising by 13% to €8.9 billion.

Most importantly, Europe and other markets are boosting their defense spending, a move that will benefit its business. Its defence and space business made over €13.4 billion, up by 11% YoY. 

The company now expects to deliver 870 planes this year and to generate €7.5 billion in EBIT. At the same time, it is boosting its shareholder returns by increasing the payout ratio from 40% to 50%. 

Airbus share price technical analysis 

The daily timeframe chart shows that the AIR stock has rebounded in the past few days. It has moved from a low of €189 to the current €200.

A closer look shows that the stock is forming a head-and-shoulders pattern, a popular bearish reversal sign. Its head is at the last year’s high of €221 , while the left shoulder is at the left shoulder at €216. 

Therefore, there is a likelihood that the stock will keep rising as it continues to form the right shoulder. It will then resume the downtrend, and possibly retest the neckline. 

The bearish outlook will become invalid if the stock moves above the shoulder at €216.