UBS has reduced its price target for Airbus to €225 from €240 and trimmed its earnings-per-share estimates by roughly 3-5%, citing weaker market sentiment and lower near-term profit expectations ahead of the planemaker's full-year results.
Ian Douglas-Pennant, the UBS analyst covering the stock, said a reassessment of pricing trends has led the bank to assume only modest fare increases over the coming years. UBS now forecasts price rises of 2.7% in 2026, 1.6% in 2027 and 1.2% in 2028, and expects "limited upside risk" to those assumptions.
The bank notes that tight supply conditions that have been in place since 2024 are not likely to show up materially in the profit and loss for the A320neo family until much later. Given current order-to-delivery lead times of at least six years, UBS expects the supply-related effects on that family to be apparent in the 2030s rather than immediately.
Market sentiment around Airbus has cooled since UBS issued its fourth-quarter results preview, Douglas-Pennant said. Investor conversations indicate market participants expect management to set delivery guidance near 880 aircraft for 2026, with some voices anticipating actual output of 860-870 units.
Reflecting weaker-than-expected January deliveries and persistent supply constraints, UBS now models 880 deliveries for 2026, down from its prior assumption of 905. The analyst nonetheless allows for an upside scenario in which Airbus guides to 900 deliveries, a move he argues could send an "ambitious message to the supply chain" and leave the balance of risk tilted to the upside when results are released.
On profits, UBS has reduced its 2026 EBIT estimate by approximately €400 million to €8.0 billion, versus a consensus figure of €8.3 billion. The bank anticipates Airbus will provide guidance in a €7.5-8.0 billion range, which Douglas-Pennant describes as "in line, or very slightly above, market expectations." He added that if management chooses to set aggressive delivery targets they may, as in 2025, adopt a more conservative tone on EBIT guidance.
Free cash flow is modeled at €5.1 billion for 2026 in UBS's work and the bank expects Airbus to guide to around €5 billion. UBS notes this level of cash flow guidance would likely be in line with or a touch below consensus expectations.
Douglas-Pennant also highlights that Airbus is likely to accept higher inventory carrying costs as part of efforts to support suppliers. He suggests the company may opt for more conservative guidance on earnings if it views any delivery targets it sets as ambitious and therefore riskier to meet.
Looking beyond the next year, UBS says that constrained deliveries in 2026 paired with a recovery in broader supply-chain health could be interpreted positively. In that case, the analyst would view improved supply resilience as an enhancement to Airbus' productive capacity and constructive for the company's longer-term outlook.
Key points
- UBS cut Airbus' price target to €225 from €240 and trimmed EPS by 3-5% amid softer sentiment.
- The bank now expects modest pricing gains of 2.7% in 2026, 1.6% in 2027 and 1.2% in 2028, with limited upside risk.
- UBS models 880 deliveries for 2026 (down from 905), lowers 2026 EBIT to €8.0 billion and forecasts free cash flow of €5.1 billion, while noting guidance may range €7.5-8.0 billion for EBIT and around €5 billion for FCF.
Risks and uncertainties
- Delivery volumes - January deliveries and ongoing supply constraints have reduced near-term delivery assumptions; continued disruption could further affect revenues and production-related metrics. This risk primarily affects aerospace manufacturing and aircraft supply chains.
- Guidance posture - If management chooses ambitious delivery targets, Airbus may conservatively guide on EBIT and other metrics, which could temper near-term market expectations; this impacts investor sentiment and aerospace sector earnings visibility.
- Inventory and supplier support costs - Airbus is likely to absorb higher inventory costs while supporting suppliers, which could weigh on margins and free cash flow in the short term; this has implications for corporate funding needs and balance-sheet management in the aerospace sector.
UBS's revisions reflect its view that pricing opportunity in the near term is limited and that supply-chain dynamics will continue to shape delivery and profit trajectories. While the bank leaves open upside scenarios tied to more ambitious delivery guidance, its base-case models point to lower deliveries, slightly reduced EBIT and modestly constrained cash flow relative to prior projections.