Safran Stock: Up 41% in 2025, an Exceptional Year Despite the April Tariff Shock

A Two-Phase Journey: The Upswing Followed by April's Storm

Safran's stock market year unfolded in two distinct phases. In the early months of 2025, the stock rose steadily, driven by market enthusiasm and the group's solid fundamentals. However, between April 2 and April 7, everything changed: the stock plummeted by 17.64% in just four days, dropping from 244.40 euros to 201.30 euros. This decline occurred during a sharp sector-wide movement triggered by the announcement of US tariffs and concerns over the aerospace supply chain. Howmet Aerospace, a strategic supplier of parts for the industry, mentioned the possibility of halting certain deliveries affected by the tariffs at that time. A correction of nearly 8% had already occurred a few weeks earlier in early March, indicating growing market nervousness. Recovery began later in April, but it took several months for the stock to reach its previous highs. Despite this volatility, Safran managed to outperform the CAC 40 by nearly 30 points over the year.

Record 2024 Results Reassure on Trajectory

Safran's stock market performance is supported by strong fundamentals. In February 2025, the group reported record-setting 2024 annual results: revenue of 27.32 billion euros, up 17.8%, and an adjusted current operating income of 4.12 billion euros, an increase of 30.1%. The free cash flow was 3.19 billion euros, exceeding the consensus. The operating margin reached 15.1%, up by 150 basis points, driven by the civil aftermarket activity and the return to profitability of the Aircraft Interiors division. Notably, Safran began to recognize profits on LEAP-1A contracts starting in 2025, after several years with no margin recognition.
For 2025, guidance has been raised: the group now targets current operating income between 4.8 and 4.9 billion euros (up from the initial 4.7 to 4.8 billion euros) and free cash flow of 3 to 3.2 billion euros, higher than the previously anticipated 2.8 to 3 billion euros. Revenue growth is expected to be around 10%, supported by a 15% to 20% increase in LEAP engine deliveries. These positive revised forecasts remain subject to supply chain uncertainties and a tariff impact estimated between 100 and 150 million euros in 2025.

2026: Balancing Structural Support and Valuation Caution

The consensus among analysts reflects measured optimism. With an average target around 330 euros, the potential upside is nearly 12% compared to the closing price of 297.40 euros. This target reflects confidence in Safran's business model, which is backed by recurring aftermarket revenues and strong demand in both civil aviation and defense sectors.
The growth drivers for 2026 include the expansion of services (with particularly strong momentum in CFM56 spare parts), the gradual integration of the actuation and flight control activities acquired from Collins Aerospace, and the development of new MRO capabilities in Asia. The group also benefits from a 5 billion euro share buyback plan between 2025 and 2028, demonstrating its financial strength.
However, several uncertainties remain: ongoing delays in LEAP engine deliveries, cost pressures associated with residual inflation and industrial investments, as well as the uncertainty over US tariffs. The valuation, considered premium by some observers, could limit the appeal for investors sensitive to multiples. In summary, Safran approaches 2026 with strong fundamentals and increased visibility, but in an environment that requires vigilance regarding operational execution and geopolitical balances.