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While the Rafale has been making headlines lately and the Falcon 6X recently obtained EASA and FAA certification, the company Dassault Aviation is making headlines! For its part, Dassault Aviation (AM) shares are moving close to their all-time highs on the stock market and have gained more than 40% over one year. However, is this an investment opportunity for the remainder of 2023 and for 2024? Should you invest in Dassault Aviation shares on the stock market? Discover our opinion and analysis of the Dassault Aviation stock.
Increase in the order book thanks to the Rafale: Dassault Aviation wins a contract in India and the 2nd phase of the Indonesian contract is activated
Among the latest news from the Dassault Aviation company, we find the announcement of August 10, 2023 validating the implementation of the second tranche of the contract signed with Indonesia in February 2022 relating to 18 Rafale.
In total, 24 aircraft were ordered by the country for the Indonesian National Army. For the Dassault Aviation company, this is only the “beginning of a long-term partnership with the Indonesian authorities”.
On July 14, 2023, Dassault Aviation announced that it had been selected by the Indian government to equip the Indian Navy. The country therefore ordered 26 Rafale Marine from the aeronautical and defense company.
Dassault Aviation’s order book could also increase thanks to the Falcon 6X.
On August 22, 2023, the Falcon 6X was, in fact, certified by the EASA (European Aviation Safety Agency) and the FAA (Federal Aviation Administration) after a test campaign of more than two years. This decision should facilitate the certification of the new business jet by other national aeronautical agencies and contribute to the entry into service of the Falcon 6X.
A disappointing first half for Dassault Aviation
The aircraft manufacturer Dassault Aviation published disappointing half-year results with few aircraft deliveries, low order intake with a drop of 90% compared to 2022 to 1.7 billion euros and an operating profit down 24 % to 151 million euros.
The year 2022 was marked by record orders for Dassault Aviation. The company has in fact recorded orders for 125 Rafale Export, 39 Rafale for France and 87 Falcon for a total amount of 35 billion euros – the largest order book in its history.
Despite the international context, which is still unstable, in particular because of the war in Ukraine, supply chain difficulties and the lack of qualified personnel, the Dassault Aviation company continues to improve its profitability in the first half of 2023 with an operating margin adjusted by 6.6% of turnover (compared to 6.5% for the same period in 2022).
Technical analysis of Dassault Aviation shares
Between its low point of December 2021 at 81.85 euros and its high point of June 8, 2022 at 166 euros, Dassault Aviation shares gained more than 102%.
Dassault Aviation share prices then fell by more than 48% until October 2022 to reach 112 euros before accelerating and forming an all-time high on April 13, 2023 at 188.5 euros.
Since this historic high in April 2023, Dassault Aviation shares seem to have difficulty forming new highs on the stock market. Let’s discover 2 possible scenarios on the Dassault Aviation share for the end of 2023 / beginning of 2024 according to the technical analysis.
Stock market graphic analysis of Dassault Aviation shares
Source: TradingView
Bullish scenario for Dassault Aviation stock
: If Dassault Aviation shares remain above the Ichimoku cloud, the resistances to watch will be the levels of 179.9 euros and 183.1 euros, as well as the bearish trend line.
Bearish scenario for Dassault Aviation stock
: Dassault Aviation shares could continue to fall towards the lower limit of the triangle towards the supports located at 175.7 euros and 173.3 euros before reaching its previous low points.
Our opinion on Dassault Aviation stock for the end of 2023 and the beginning of 2024
Despite a relatively dull and declining first half, Dassault Aviation has not changed its annual objectives.
The company had prepared for a drop in its turnover compared to 2022 (which it had clearly communicated to investors) and anticipated a delivery of 15 Rafale and 35 Falcon.
Therefore, investors should expect a much better second half of 2023 and could take advantage of this to acquire Dassault Aviation shares on a decline. The week of September 18, 2023, for example, Société Générale was still long on Dassault Aviation shares with a price target that it raised to 204 euros.
Beyond Rafale orders from France, the Dassault Aviation company will benefit from orders from India and Indonesia. It is also possible that orders for the new Falcon 6X business jet will accelerate, which could support the group’s future growth.
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