AERO.SW (Motana Aerospace) Equity Research

Current price: CHF17

Target Price: CHF 32

Some other things I think is worth noting but not mentioned in the slides is that 

1. inflation has significantly decreased in the euro area compared to 2022 and 2023.  Expenses such as gasoline and freight costs, raw material that were eating the margin in the past couple years should experience substantial reductions. 

2. The company has just undergone an investment phase over the past five years, hiring a lot of employees. Moving forward as they progress into this ‘profit phase,’ historical trends suggest that they will benefit from the increased net sales/employee growth during the ‘growth phase’. 

3. I anticipate that the incremental operating margin will be positive during the projection period due to said points and eventually align with the average of their peers.(Their operating margin is significantly below industry giants average by around 10 times atm)

4. Lastly, their cash flow should turn positive after the initial substantial CAPEX and they mentioned a 2025 dividend issuance for fy2024 in the nov earning call