RBC Updates Price Target, Forecasts for Safran After 'Strong' H1 Performance; Outperform Rating Kept

01:01 AM EDT, 07/29/2026 (MT Newswires) -- RBC Capital Markets revised its price target and earnings assumptions for Safran (SAF.PA), after the aerospace and defense company's services business bolstered its interim results. "Safran reported strong 1H26 results, with revenues of EUR17.6B (up 19%) and adj. EBIT of EUR3.2B (18.4% margin). As expected, the upside was driven by the Propulsion segment, with 1H26 civil [aftermarket] services up 40% and spare parts up 28%. Safran raised its 2026 financial guidance, as expected, and we continue to view the implied 2H26 outlook as conservative. The margins across the business were strong. We continue to believe investors will reward Safran for a strong AM as the debate shifts to 2027 growth. We maintain Outperform and increase our price target to EUR400 (from EUR370)," according to a Tuesday note. As part of the earnings report, Safran upgraded its full-year 2026 outlook, including raising its revenue growth target to up mid-teens from the previous low-to-mid-teens forecast and its recurring operating income guidance to between 6.4 billion euros and 6.5 billion euros from the prior 6.1 billion euros to 6.2 billion euros. The free cash flow outlook is now expected to come in between 4.7 billion euros and 4.9 billion euros, up from the previous target of 4.4 billion euros to 4.6 billion euros. The research firm noted the recurring operating income and free cash flow guidance surpassed consensus of 6.2 billion euros and around 4.6 billion euros, respectively, while the revenue growth outlook aligned with 14.5% consensus growth. Against this backdrop, analysts increased their revenue forecasts for 2026 through 2028. Meanwhile, RBC's adjusted EPS estimate for 2026 was trimmed and raised those for the next two years.