Airbus shares slip after Berenberg cuts rating to hold

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Airbus shares slip after Berenberg cuts rating to hold
Credit: © Reuters.

By Scott Kanowsky -- Shares in Airbus Group SE (EPA: AIR ) fell on Monday after analysts at Berenberg said they have made a "reluctant" cut to their rating for the European planemaker, citing "complexities" surrounding its near-term outlook.

In a note to clients, the analysts lowered their rating of Airbus to hold from buy as they warned that recently high inflation and ongoing supply chain challenges will likely impact the company in 2023.

They added that although there is an "obvious" case for a bullish view of Airbus over the long-term, there should be a better "or at least de-risked" entry point into the stock.

The revised rating comes after Airbus announced last week that it delivered 661 jets last year, below a target of 720, due in part to constraints to the inflow of raw materials and labor. Chief Executive Guillaume Faury flagged that the supply chain was still "fragile" heading into 2023.

However, Airbus' annual deliveries were higher than major U.S. rival Boeing Co (NYSE: BA ) for the fourth straight year. In November, Boeing laid out plans to turn around its performance, which has taken a hit since two fatal crashes of its 737 Max plane in 2018 and 2019.

Boeing Chief Executive David Calhoun also told investors last April that the delivery of its giant new 777X jet will be pushed back until at least 2025. Deliveries are a key figure for jet makers because much of the total purchase price is paid by airlines when they are completed. The Berenberg analysts said the production delays at Boeing are "gifting" market share to Airbus.

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