BN · rank #12 · 2026-07-24
HO
PARIS · EUR · $55.70B (USD)
The exact numbers the algorithm saw.
| Composite score Z-score blend of the factors below; drives the rank. | -0.28 |
|---|---|
| Forward revenue growth Consensus forward revenue growth. | +8.4% |
| Forward net margin Consensus forward net margin. | +8.0% |
| Net margin TTM Trailing twelve month net margin. | +7.6% |
| Margin expansion Forward minus trailing net margin (percentage points). | +0.5% |
| Forward PEG Forward P/E to growth. Below 1 is cheap for the growth. | 1.79 |
| Debt / FCF Net debt relative to free cash flow. Lower is safer. | 1.35× |
| Analyst upside Spread between the consensus 12m target and the current price. | +21.0% |
| Last EPS surprise Most recent reported EPS versus consensus. | — |
| Market cap (USD) | $55.70B |
The AI research card
Independent qualitative review of each pick before the order is placed. On the rare day the research service is unavailable, the paper book trades on the quant ranking alone and no card appears here.
Summary
Thales is Europe's largest defence electronics group, spanning sensors, avionics, communications, and cybersecurity, with defence now exceeding half of group sales and a growing H1 2026 order backlog at 1.14x book-to-bill.
Rationale
The bottleneck-solver thesis is directly reinforced: Thales supplies the electronics, surveillance, and integrated systems layer that European governments cannot quickly replicate in-house, evidenced by 27% organic Q1 order growth and a €12.5 billion H1 intake as rearmament accelerates.
Material risks
- 1Programme cancellation risk is not theoretical — the German F126 frigate termination already triggered a ~€450 million charge and cut reported net income ~27%, demonstrating that large sovereign customers can and do exit contracts, directly threatening backlog quality.
- 2France's temporary additional corporate tax pushed the effective rate to 25.8%, and further fiscal measures targeting defence windfall profits could compress the adjusted net margin (currently ~8%) faster than the modest 47bp expansion the model assumes.
AI verdict council
Each pick is reviewed independently by 3 models before any order. 2 of 3 voted to proceed.