Senior Plc: Why I Remain Bullish Despite Challenges Faced On Airplane Production

2025-05-09 16:33:43 ET

Summary

• Senior plc benefits from rising commercial airplane production and growing defense and energy markets, despite mixed stock performance and soft FY24 sales growth.
• Aerospace segment drives growth, with 70% of civil sales from single-aisle planes; Flexonics faces challenges due to weak automotive market.
• FY24 revenues grew 1%, with a 9.9% rise in aerospace sales; margins stable at 4.8%, free cash flow increased to £17.3 million.
• Maintaining buy rating with a $2.75 price target, expecting significant EBITDA and free cash flow growth as airplane production rates increase.

Senior plc ( SNIRF , LON: SNR) is one of the companies that I believe can benefit from longer-term increases in commercial airplane production and capitalize on growing demand in the defense and energy markets. My buy rating from February this year has so far yielded a 4.3% return compared to 4.8% decline for the S&P 500 (SP500), but we do note that the listing in London lost nearly 7%. Denominated in dollars, the stock price has not move at all....

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