Thales Shares Stabilize at Key Level Amid Analyst Optimism and High Valuation

Thales shares may find support at around 132.45 EUR, according to technical analysis. Despite 70% of companies showing lower growth and profitability, analysts are bullish, with a positive consensus recommendation. However, the stock's valuation appears high relative to tangible assets, and recent analyst revisions have been negative.

Thales (THAL:PA), a leading aerospace, defense, and security company, has experienced a steady rise in its share price despite the challenging economic environment that has seen over 70% of companies display lower growth and profitability [1]. This unexpected bullishness can be attributed to a positive consensus among analysts, who maintain a bullish outlook on the stock [1].

According to technical analysis, Thales shares may find support at around 132.45 EUR [1]. This level is derived from various indicators, including moving averages and trend lines, which suggest that the stock could experience a brief respite from its downward trend.

However, despite the bullish sentiments, some analysts have raised concerns about Thales' valuation, which appears to be high relative to its tangible assets [1]. In recent weeks, several analysts have revised their price targets and recommendations for Thales, citing concerns about its valuation and the potential impact of economic uncertainty on its growth prospects [2].

UBS, a leading global financial services firm, is one of the analysts that has revised its stance on Thales. The firm recently raised its recommendation on Thales from "Neutral" to "Buy" and increased its price target from 145 EUR to 155 EUR [1]. UBS's optimistic outlook is based on the company's strong position in the aerospace and defense industries, which are expected to benefit from increasing government spending and growing demand for advanced technology solutions.

Despite the concerns about its valuation, Thales' strong fundamentals and growing market opportunities are likely to continue to attract investors. The company is currently involved in several high-profile projects, including the supply of antennas for Lilium's electric vertical takeoff and landing (eVTOL) aircraft [1]. This partnership highlights Thales' expertise in cutting-edge technology and its potential to drive growth and innovation in the aerospace and defense industries.

In conclusion, while Thales shares may find support at around 132.45 EUR, concerns about its high valuation and the challenging economic environment are likely to persist. Despite these concerns, the company's strong fundamentals, growing market opportunities, and partnerships with leading industry players are likely to continue to drive growth and attract investors.

References:
[1] MarketScreener. Thales. Retrieved August 11, 2022, from https://www.marketscreener.com/quote/stock/THALES-4715/graphics/
[2] Reuters. Thales. Retrieved August 11, 2022, from https://www.reuters.com/world/europe/thales-shares-rise-after-ubs-raises-price-target-2022-08-02/