Dassault Aviation Shares Fall 2.91% at Close After Surge Linked to Ukraine

Stock Performance Details

The French aircraft manufacturer's stock declined by 2.91% on Wednesday to finish at 273.20 euros, after closing at 281.40 euros the previous day. Trading volumes remained modest with only 0.08% of capital changing hands, indicating limited profit-taking after Monday's more than 6% jump following the Ukrainian letter of intent announcement. This correction comes as the CAC 40 itself fell by 0.18% to 7,953.77 points. Over a longer period, the stock shows a decline of 1.16% over seven days and 1.66% over three months, but still maintains a remarkable lead of 42.44% over one year, far surpassing the 9.28% progress of the Paris index over the same period. Technically, the stock is now in a critical zone. The 50-day moving average stands at 281.24 euros, a level that the stock has just crossed downwards. The RSI at 56 remains in a neutral zone, suggesting no overbought or oversold conditions. More worryingly, the MACD histogram in positive territory (+1.00) remains weak, and the stock is dangerously approaching its major support at 269.80 euros, while resistance is at 286.80 euros. The negative Chaikin Money Flow (CMF) at -0.18 indicates persistent selling pressure, confirming investor caution after the early week's euphoria.

Impact of the Ukrainian Deal Announcement

The announcement on Monday, November 17, of a letter of intent between France and Ukraine for the acquisition of up to 100 Rafale F4 jets had propelled the stock into a sharp rise. The potential contract amount could be around 20 billion euros, although no firm commitment has yet been signed. It is not yet a firm and final contract, which partly explains the current investor caution. Production capacity issues also remain a major challenge: Dassault Aviation aims for a production rate of five aircraft per month, while the manufacturer is currently at a rate of three. Deliveries are not expected to start before 2029, with a complete fleet planned for 2035. Meanwhile, France and Germany are discussing the abandonment of the joint development project of a new generation fighter jet, the SCAF, intended to replace the Rafale and the Eurofighter by 2040. The project, estimated to cost over 100 billion euros, is hampered by disputes over task sharing and intellectual property rights, with the CEO of Dassault Aviation stating in September that the manufacturer had the capacity to build the next generation of combat aircraft alone. This strategic uncertainty, although less immediate than the Ukrainian order, weighs on the long-term visibility of the group.

Market Consolidation Movements

Wednesday's correction is part of a classic consolidation movement after a strong speculative push. The stock remains well above its 200-day moving average located at 287.66 euros, which it has just passed under this long-term reference, signaling a possible change in dynamics. The Bollinger Bands, with an upper limit at 286.67 euros and a lower limit at 269.31 euros, frame a corridor in which the stock is currently moving. The stochastic indicator is sending a sell signal, indicating a waning of the short-term bullish momentum. Investors remain divided between the enthusiasm generated by the exceptional commercial prospects of the Rafale and caution due to the uncertainties surrounding the realization of these announcements. The high volatility of the stock, with an ATR of 4.14 and a one-month volatility of 8.05%, reflects this hesitation. The nearly zero beta at 0.02 confirms that the stock moves in a completely uncorrelated manner from the market, driven by specific catalysts in the defense sector. The next few sessions will be crucial to determine whether the stock will find solid support around 270 euros or if a more marked correction towards 260 euros is underway.