Thales plunged on the Stock Exchange after the first quarter results of 2026 were poorly received by the financial community last week. The stock market investors and financial analysts, who had relatively high expectations, were disappointed by the level of orders and annual outlook of Thales, which has benefited from the defense sector boom since the beginning of 2022. In the first quarter of 2026, Thales’ revenue growth (excluding acquisitions and exchange rate effects) was almost double digits (which is very desirable in the current global economic context) and slightly better than expected.
The rising geopolitical tensions contribute to boosting Thales’ defense activity, which is particularly dynamic. The Middle East war benefits the company, which maintains “a strong positioning in air defense and surveillance,” according to AlphaValue. The strong growth of avionics and the acceleration of the space division have benefited Thales’ aeronautical activity. The negative evolution of currencies has masked some of the strong underlying dynamics of the activity, the research firm points out. Thales, a defense jewel of the CAC 40, however, benefits from very high demand in key segments of air defense, surveillance, and munitions.
Context:
– Thales faced a decline in the Stock Exchange due to disappointing first-quarter results in 2026.
Fact Check:
– Thales’s revenue growth in the first quarter of 2026 was almost in double digits, exceeding expectations.
What are the prospects for Thales? And what risks is the defense gem of the CAC 40 facing? With the massive increase in defense budgets in many countries (especially in Europe), a real structural paradigm shift, Thales shows promising prospects and noticeable visibility. But AlphaValue warns of the bottleneck represented by the supply chain tensions related to mechanical parts, printed circuits, and propellant powders. In addition, the war in the Middle East could impact Thales’ aeronautical activity in the second quarter. Even though Thales has confirmed its financial goals for 2026 and demand remains structurally strong in defense, attention should be paid to supply chain issues and the impact of the war with Iran on civilian aviation and overall economic activity.
The update of the French Military Programming Law (36 billion euros of additional defense spending by 2030) aims primarily to “strengthen Thales’ key competencies and secure the medium-term order book,” according to AlphaValue, which believes that American stock shortages with interceptors like the Patriot could allow Thales’ SAMP/T system to gain market share. And tensions with Iran in the Strait of Hormuz “have revived the demand for mine warfare,” adds the analytical bureau.
Context:
– Thales faces risks due to supply chain tensions and potential impacts of the war with Iran.
AlphaValue considers Thales’ stocks undervalued (at the time of writing), with a stock price well below the theoretical fair value. The research firm has raised its recommendation to buy after the stock plunge, offering Thales stocks new upward potential in the stock market, with a “constructive” (bullish) view in the medium and long term. A “defensive growth value,” Thales is an “inevitable asset in our portfolio,” notes AlphaValue.
According to the research firm, Thales’s pricing power, the depth of its order book, its high-end portfolio, and strategic positioning make Thales stocks fundamentally resilient and attractive. Since the outbreak of the war in Ukraine, readers of Momentum, the daily premium investment newsletter based on technical and financial analysis from Capital, have been able to achieve significant gains in Thales stocks in the stock market, recommended for purchase on numerous occasions. What target price can be set for Thales stocks according to financial analysis? And is it currently a good timing to invest, according to technical analysis? Answers in Momentum. By choosing an annual subscription, 5 months are free. To take advantage, simply click on the link provided below.
