Airbus Stock: Dollar Weakness Triggers Analyst Downgrade

Airbus shares have fallen sharply after briefly reaching a three-month high on hopes of a lucrative Chinese order. The European aerospace giant's stock dropped to €166.58 in Paris trading, down from nearly €174 recently. This decline follows disappointing May delivery figures, with only 51 aircraft reaching customers—fewer than April's 56 and substantially below March's 71 deliveries. After five months, Airbus has delivered just 243 aircraft, less than 30% of its ambitious annual target of 820 planes. The situation echoes last year's challenges when supplier bottlenecks, particularly with engines, disrupted delivery schedules and caused the company to miss its targets.

Currency Headwinds Compound Challenges

Adding to delivery concerns, analysts at Citigroup have downgraded Airbus from "Buy" to "Neutral" and reduced their price target to €183. The downgrade primarily stems from the US dollar's recent weakness against the euro, creating significant headwinds for the aircraft manufacturer. This currency shift presents a particular challenge for Airbus, which incurs most costs in euros while generating revenue predominantly in dollars. The unfavorable exchange rate directly impacts margins and profit prospects, prompting investors to reassess their positions despite the company's well-filled order books.

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Source StockWorld