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EADS

Analysis before buying or selling EADS shares

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Trading EADS Group shares on the online stock market is now possible and we will help you to make a good analysis of its share price.

Elements to consider before selling or buying EADS shares

Analysis N°1

First of all, we notice that for several years, the aeronautics market has experienced very interesting growth with a significant increase in demand.

Analysis N°2

In the field of military aviation, the EADS group should also benefit from a significant increase in defence budgets for certain emerging countries such as China and India.

Analysis N°3

Finally, EADS should also benefit from the rise in oil and therefore fuel prices by developing aircraft that consume less and that would give it a head start over its main competitors in the eyes of its customers who are constantly seeking savings.

Analysis N°4

The general decline in defence spending by OECD countries, which should have an impact on EADS' order book in the coming years.

Analysis N°5

On the other hand, the economic crisis that has affected Europe in recent years could also have a negative impact on the support of countries in this area for the development of EADS.

Analysis N°6

Finally, while EADS is still a leader in several of its core businesses, competition is becoming increasingly fierce and the major groups in this sector are waging a merciless war against each other, which is putting additional pressure on prices.

Analysis before buying or selling EADS shares
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General presentation of EADS

The EADS Group recently changed its name and is now called the Airbus Group. It is in fact the European leader and second world leader in the aeronautical, space and defence industry. As you may have understood, its activities can be divided into three sectors; the combined sector of commercial aviation, military aviation and civil helicopters, plus defence systems and aerospace systems.

Due to its numerous technological innovations and a constant demand on the international level, EADS has generated significant profits over a number of years.

The price of EADS shares (Airbus) is currently quoted in section A of the Euronext Paris stock market in France. The Airbus group share price is also included in the composition of the National French stock market index, the CAC 40, and it is therefore one of the 40 French companies with the largest stock market capital.

The major competitors of EADS

The EADS group, despite an inventive strategy based on innovation, is not the only business in this sector and needs to constantly fight to keep its position in the worldwide classification. In fact, a number of competitors are seeking to win parts of the market and it is extremely important that you learn about them. To be able to correctly analyse the EADS share price you will need to take into account both the technical analysis of its share price as well as fundamental events that could influence its movements over the medium or long term. For that reason, studying the competitors and monitoring their major company events is primordial. Here therefore we present a list of the major competitors of EADS on the international level.

BAE Systems Plc

Northrop Grumman Corporation

Raytheon Company

Cobham plc

Dassault Aviation SA

Goodrich Corporation

Saab AB

General Dynamics Corporation

Motorola, Inc.

Thales SA

The major partners of EADS

The EADS Group has been able to create strategic partnerships with some of its competitors in order to participate in certain projects and gain market parts. Here we offer you the opportunity to learn more about these different partnerships implemented by the group over recent years.

Safran 

It was associated with Safran in the Ariane 6 programme in 2014.

Dassault Aviation

The Dassault Aviation Group has been a long-time partner of EADS with a share capital in the company that was recently highly diminished.

Airbus

Finally, it is important of course to cite Airbus as a partner of EADS as this group has now taken total control of this business.

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Positive factors for EADS shares
The factors in favour of a rise in the EADS share price:

If, like many other particular stock market investors, you want to take a long position on the course of EADS shares, you should of course decide which way you are going to trade. The possibility of a long-term uptrend or on the contrary, of a long-term bearish movement is based on the strengths or on the weaknesses of this American company and of its capacity to face the future. So, let’s start by listing EADS’ advantages and strong points which are leaning for a long term upward movement.

First of all, we can of course, underline the fact that the group EADS has a well thought strategy concerning its activities. The group carries out different activities in a variety of fields as we have just mentioned before, which allows it to diversify its sources of income. Thanks to this wide range of activities, the company is more protected against the risk associated with a single sector.

We can also mention as an undeniable strengths EADS’ innovation capacity. Research is in fact paramount to cope with the high competition in the technological sectors and EADS has already shown that it is takes this element seriously in the past. Each year, the American group consecrates a big part of its profits to investing in R&D, which enables it to develop more effective and innovating products and solutions and thus maintain its place among the leaders in the market.

EADS is already the holder of several patents concerning the latest advanced technologies. In addition, it has been able to seduce many customers around the world thanks to its ability to offer products and services that meet the needs of specific companies.

Always among EADS main strengths, we can mention the efforts that it has made concerning the external development of the company. EADS has adopted a strategy of multiple acquisitions in different fields of activities and in various countries. That was particularly the case with the reacquisition of some of its suppliers such as ND, SatCom, GmbH, and SES Astra. The acquisition of its suppliers obviously gives EADS a better control of its costs of production and it also guarantees the supply of products, services and raw materials necessary for its activities.

Of course, the ranking of EADS on the international market is another strength that should be mentioned. The American company is still the world’s leader in the sector of civil aviation, which allows it to have more weight among its customers and partners, but also to get numerous large scale and interesting contracts. It should also be noticed that the subsidiary Eurocopter, which belongs to EADS, is also an international leader in its sector of activity.

Negative factors for EADS shares
The factors in favour of a drop in the EADS share price:

As we have just seen in detail, the advantages of EADS shares and especially the strengths of this American company are enough to reassure investors who are searching for a long term asset to trade. But your strategy can only be efficient if you consider the negative point as well. Here are therefore the elements that could cause a possible decline in the price of this title and the main weaknesses of this company.

First of all, even if we have seen EADS ability to expand internationally, the fact that its production units are located in different countries and territories could be a problem. In fact, the far geographical situation of its different platforms of production give a certain weakness to the general production, sometimes with elevated costs of transportation, which is of course detrimental to the overall profitability of the company

We also know that the foreign exchange market has a significant influence on the evolution of EADS results. In fact, this American company makes its sales in US dollars, the exchange rate of a dollars against the euro could be a limitation. In fact, even if the euro currently lacks competitiveness when compare to the dollar, EADS’s exports towards Europe are less competitive because of those unfavorable exchange rates.

We have also notice that the company’s activities are still weak concerning the American market. There is still a lot of work to be done to build a reputation, which is one of the company’s main challenges when compare to its competition who benefits from the strengths of the US market.

Finally, it is also important to site among the weak points of this asset the recent scandals that have affected this company concerning manufacturing problems detected on its A380 aircraft. This flaw has of course led to a decline in the overall trust of its customers and investors who fear the situation could reproduce in the future.

As you can see, EADS weaknesses are almost as numerous as its advantages, a fact that you should take into account when setting up your future long-term trading strategies.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

When did EADS change its name to Airbus?

In July 2013, the EADS Group announced a change in its strategic identity by adopting the name Airbus Group. Indeed, at that time, the EADS Group decided to adopt a completely new strategy based essentially on a regrouping of its activities in the defence and space sector and therefore incorporating a change of name. It is still today under the name of Airbus that you can trade this value.

Who are the public shareholders of the EADS Group?

Even today, the EADS group still has various public shareholders in its capital. The French State still holds 11.1% of the company's capital, the German State also holds 11.1% and the Spanish State holds 4.17% of the group's shares. The remaining 73.68% of the capital of this company is floating capital and corresponds to shares freely traded on the financial markets.

What are the important dates to remember for the EADS share?

The date of the creation of EADS, 10 July 2000, is particularly noteworthy here. Another important date is 16 July 2007, which corresponds to the end of the dual management of the group. On March 27, 2013, Lagardère and Daimler will withdraw from this group. On January 2, 2014, the EADS Group will become the Airbus Group. Finally, on 1 January 2017, Airbus Group will simply become Airbus.

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