What is AIR.PA's Intrinsic value?

Airbus SE (AIR.PA) Intrinsic Value Analysis

Executive Summary

As of April 24, 2026, Airbus SE's estimated intrinsic value ranges from $44.13 to $161.64 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $161.64 -3.9%
Discounted Cash Flow (5Y) $155.69 -7.4%
Dividend Discount Model (Multi-Stage) $123.08 -26.8%
Dividend Discount Model (Stable) $81.99 -51.2%
Earnings Power Value $44.13 -73.8%

Is Airbus SE (AIR.PA) undervalued or overvalued?

With the current market price at $168.16, the stock appears to be significantly overvalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Airbus SE's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.0% 3.5%
Equity market risk premium 5.8% 6.8%
Adjusted beta 0.85 1.09
Cost of equity 7.9% 11.5%
Cost of debt 4.0% 4.5%
Tax rate 20.5% 22.8%
Debt/Equity ratio 0.14 0.14
After-tax WACC 7.4% 10.5%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 8.9% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $73,420 (FY12-2025) to $111,826 (FY12-2035)
  • Net profit margin expansion from 7% to 13%
  • Capital expenditures maintained at approximately 5% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $156 $127,292M 74.1%
10-Year Growth $162 $132,007M 52.9%
5-Year EBITDA $230 $186,425M 82.3%
10-Year EBITDA $239 $192,997M 67.8%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 45.4%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 9.7%
  • Long-term growth rate: 2.0%
  • Fair value: $123.08 (-26.8% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 11.5% (Low) to 7.9% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $44 to $120
  • Selected fair value: $81.99 (-51.2% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $3,368M
Discount Rate (WACC) 10.5% - 7.4%
Enterprise Value $32,123M - $45,696M
Net Debt $3,943M
Equity Value $28,180M - $41,753M
Outstanding Shares 792M
Fair Value $36 - $53
Selected Fair Value $44.13

Key Financial Metrics

Metric Value
Market Capitalization $133230M
Enterprise Value $137173M
Trailing P/E 25.52
Forward P/E 21.32
Trailing EV/EBITDA 13.75
Current Dividend Yield 181.29%
Dividend Growth Rate (5Y) 11.34%
Debt-to-Equity Ratio 0.14

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $48.49
Discounted Cash Flow (5Y) 25% $38.92
Dividend Discount Model (Multi-Stage) 20% $24.62
Dividend Discount Model (Stable) 15% $12.30
Earnings Power Value 10% $4.41
Weighted Average 100% $128.74

Investment Conclusion

Based on our comprehensive valuation analysis, Airbus SE's intrinsic value is $128.74, which is approximately 23.4% below the current market price of $168.16.

Key investment considerations:

  • Strong projected earnings growth (7% to 13% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.14)
  • Historical dividend growth of 11.34%

Given these factors, we believe Airbus SE is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.