(CercleFinance.com) – Thales shares posted the biggest rise in the CAC 40 index on Monday on the Paris Stock Exchange, with Goldman Sachs seeing an attractive entry point into the stock which has underperformed the sector since the beginning of the year.
Around 10:30 a.m., the action of the defence, security, aeronautics and high-tech services group climbed by more than 3.8%, far ahead of the second strongest rise in the index, Orange, which rose only by 0.1% at the same time.
In a note released in the morning, Goldman Sachs believes that Thales has one of the strongest revenue growth in the sector and the strongest margins.
According to the American bank, the French company is able to convert more than 95% of its net profit into free cash flow over the next five years, a performance which should allow it to return more than 16% of its market capitalization to its shareholders, in the form of share buybacks and dividends.
Goldman says it is counting on an average growth in activity of 7% over a five-year horizon, thanks to the recovery in air traffic, the growth of the aerospace market and the rise in military budgets.
And if the share price has certainly climbed by more than 50% since January 1, the New York firm points out that this is a performance lower than that of its peers and that the title does not currently only shows a 5% premium vis-à-vis the sector, deemed insufficient given the strength of its fundamentals.
Goldman Sachs, which sees this as an interesting entry point, is therefore initiating its purchase coverage with a target price of 146 euros, revealing an upside potential of around 30%.
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