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Bottom Falling Out Of Eads Stock?  
User currently offlineAirFrnt From United States of America, joined Jul 2004, 2830 posts, RR: 42
Posted (7 years 4 months 1 week 3 days 19 hours ago) and read 6415 times:

Has anyone noticed that the bottom seems to have dropped out of the EADS stock? Check out:
ISG_SYMBOL=PEAD.PSE&ACTIVE=PSE&TYPE=1" border=0>

What is the reason behind this? It's lower then last September/October when Airbus announced their third A380 delay, and almost as bad as may, when Airbus announced the second delay. Big contract rumored to be awarded to someone else, investor concern over power 8? I doubt that the Aeroflot order and the Chinese Southern orders would be enough to have this drastic of a effect.

Is there bad news lurking in the wings?

55 replies: All unread, showing first 25:
 
User currently offlineRevelation From United States of America, joined Feb 2005, 12973 posts, RR: 25
Reply 1, posted (7 years 4 months 1 week 3 days 19 hours ago) and read 6387 times:

Sorry, I don't know, but it's an interesting picture.

Makes me wonder at what price Forgeard et al sold at.



Inspiration, move me brightly!
User currently offlineEMBQA From United States of America, joined Oct 2003, 9364 posts, RR: 11
Reply 2, posted (7 years 4 months 1 week 3 days 19 hours ago) and read 6371 times:

Quoting AirFrnt (Thread starter):
What is the reason behind this?

Well... they have invested millions into a product that no one seems to be buying..?



"It's not the size of the dog in the fight, but the size of the fight in the dog"
User currently offlineBoeingBus From United States of America, joined May 2004, 1597 posts, RR: 17
Reply 3, posted (7 years 4 months 1 week 3 days 19 hours ago) and read 6340 times:

It's probably under valued and if you are risk taker its probably a good bet for your portfolio... look BA whose stock price was in the low 20's only several years ago...

you may see doom but others may see an opportunity....

cheers



Airbus or Boeing - it's all good to me!
User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 4, posted (7 years 4 months 1 week 3 days 18 hours ago) and read 6260 times:

Well, the stock is up 2% today. A lot of the decline seems to have broadly followed general market trends. Nonetheless, it is down since Paris. However, so is Boeing and Embraer!

I've never been able to peg this stock's movements with bad or good news, with the obvious exception of the A380 delays last year. Just when I think it'll tank, it moves up; likewise, when market conditions seem to favor buying, the thing drops (i.e., since the beginning of the Paris Airshow). EAD.PA is somewhat of a mystery.



"When all is said and done, more will be said than done".
User currently offlineMariner From New Zealand, joined Nov 2001, 25709 posts, RR: 85
Reply 5, posted (7 years 4 months 1 week 3 days 18 hours ago) and read 6252 times:
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You don't think it has something to do with the massive correction that has been happening on the world stock markets these past few weeks?

The EADS stock chart looks (to me) fairly similar to the DAX (German index):

http://iracs.isg.de/eads/2005/chart_...X.ETR&TYPE=1&CTYPE=0&AVG1=0&AVG2=0

The fall-off in EADS may be slightly greater - perhaps because EADS is more dependant on the availability of credit to its customers?

mariner



aeternum nauta
User currently offlineAirNZ From , joined Dec 1969, posts, RR:
Reply 6, posted (7 years 4 months 1 week 3 days 17 hours ago) and read 6116 times:

Quoting EMBQA (Reply 2):
Well... they have invested millions into a product that no one seems to be buying..?

What product would that be?


User currently offline747fan From United States of America, joined Jun 2007, 1192 posts, RR: 1
Reply 7, posted (7 years 4 months 1 week 3 days 16 hours ago) and read 6083 times:

Quoting AirNZ (Reply 6):
What product would that be?

A certain plane that resembles a whale... duck 

It definitely has bottomed out since last year which is definitely due to the somewhat slow-selling A380, although remember that the 747 started out slow back in the early '70's. The rest after that is history. The A350 has been slow-selling as well, but the US order is definitely a big boost and some other customers have also ordered the A350 or are interested.


User currently offlineAtmx2000 From United States of America, joined Oct 2004, 4576 posts, RR: 37
Reply 8, posted (7 years 4 months 1 week 3 days 16 hours ago) and read 6003 times:

Quoting Mariner (Reply 5):
You don't think it has something to do with the massive correction that has been happening on the world stock markets these past few weeks?

The EADS stock chart looks (to me) fairly similar to the DAX (German index):

Comparing to the S&P, the drop appears to start somewhat early and appears to be steeper. Compared to Boeing, the drop starts way earlier.



ConcordeBoy is a twin supremacist!! He supports quadicide!!
User currently offlineTKV From , joined Dec 1969, posts, RR:
Reply 9, posted (7 years 4 months 1 week 3 days 16 hours ago) and read 5993 times:

Quoting Mariner (Reply 5):
You don't think it has something to do with the massive correction that has been happening on the world stock markets these past few weeks?

Not too much. The market correction a by today, from June 15 (begin Paris show) was only 3% in the US
and 6% in Europe. If we look at the Boeing stock in relation to EADS, it increased 12%. EADS fell 13%, whilst the European markets as said only 6%

The reasons of such decline I will address them separately, essentially there are the lack of confidence both in EADS and Airbus, the perception, that they are trying to resolve the problems with band-aids, as political and union interests stop the really needed measures and the fact, that the M&S policy not only do not achieve the necessary margins, but incur in huge risks. This being the reason why announcement of large orders by potentially risky customers show no effect on the stock price

To visualize the Market evolution from the beginning of the Paris show (Delta = Increment)

-------------Symbol-------June 15---Aug.20----Delta--------Delta over market--------Delta over EADS

DJI INDEX----------------13,550----13,120------(3)%
DJ STOXX INDEX--------3,900-----3,658------(6)%
EADS---- EAD.PA----------23.3------20.2-----(13)%-----------------(8%)--------------------------N.A.
BOEING--------BA----------- 98-------- 97-------(1)%-----------------+2%------------------------+12%

TKV

.


User currently offlineMariner From New Zealand, joined Nov 2001, 25709 posts, RR: 85
Reply 10, posted (7 years 4 months 1 week 3 days 15 hours ago) and read 5963 times:
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Quoting Atmx2000 (Reply 8):
Comparing to the S&P, the drop appears to start somewhat early and appears to be steeper.

The recent correction has timed differently for many stocks around the world. And currencies.

http://iracs.isg.de/eads/2005/chart_...8.DJX&TYPE=1&CTYPE=0&AVG1=0&AVG2=0

Certainly the EADS drop is steeper, as I said, but the chart is very similar to the DAX and the DJ Aerospace.

The uptick matches them, too.

mariner



aeternum nauta
User currently offlineAirFrnt From United States of America, joined Jul 2004, 2830 posts, RR: 42
Reply 11, posted (7 years 4 months 1 week 3 days 14 hours ago) and read 5876 times:

Quoting Mariner (Reply 5):
You don't think it has something to do with the massive correction that has been happening on the world stock markets these past few weeks?

Nope. Boeing is only a few points off of it's all time high, and long term manufacturing like this will be affected, but usually well after a slow down has occurred, not before.

Quoting Mariner (Reply 5):
The fall-off in EADS may be slightly greater - perhaps because EADS is more dependent on the availability of credit to its customers?

It's probably credit related, but it perhaps has more to do with how they have their hedging set up then a restricted credit access. Airbus doesn't have Boeing's credit, but it's not bad in and off itself. I think most of the corporate consumer watchdogs have EADS on alert, but no downgrades have occurred which would reflect a lack of access to capital.


User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 12, posted (7 years 4 months 1 week 3 days 14 hours ago) and read 5812 times:

Quoting Revelation (Reply 1):
Makes me wonder at what price Forgeard et al sold at.

E32.01 on 16th. March 2006.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineMariner From New Zealand, joined Nov 2001, 25709 posts, RR: 85
Reply 13, posted (7 years 4 months 1 week 3 days 14 hours ago) and read 5810 times:
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Quoting AirFrnt (Reply 11):
Nope.

Okay.

For myself, I find it tough to think it is a coincidence that the chart so similarly mirrors many major indices, together with the extraordinary correction has been happening on the world markets, and to several currencies. The rise and fall of the Kiwi dollar has been a roller coaster for me.

But - each to their own, always.

Quoting AirFrnt (Thread starter):
Is there bad news lurking in the wings?

Who knows? But then it seems odd that the share traders would know about it, and no one else.

mariner



aeternum nauta
User currently offlineNAV20 From Australia, joined Nov 2003, 9909 posts, RR: 36
Reply 14, posted (7 years 4 months 1 week 3 days 13 hours ago) and read 5780 times:

Apparently EADS stock dropped sharply on Friday on press reports that Voith was looking at possibly buying three EADS plants (including the Augsburg one that EADS has not yet finally decided to sell):-

"LONDON (Thomson Financial) - Voith, one of Germany's largest privately-held industrial groups, is interested in buying three of Airbus' German factories that are up for sale, the Financial Times reported without naming sources.

"The group is interested in the Varel and Nordenham plants as well as Augsburg, which Airbus' parent EADS said last week for the first time it is considering selling. Voith is not expected to bid for the fourth German factory at Laupheim."


http://www.forbes.com/business/feeds/afx/2007/08/17/afx4029328.html

Some investors may not be happy in principle with the idea of hiving off plants (and therefore future profits). Alternatively, they may not be happy with the prospect that a lot of them might be bought by a single (privately-owned) firm.



"Once you have flown, you will walk the earth with your eyes turned skywards.." - Leonardo da Vinci
User currently offlineIkramerica From United States of America, joined May 2005, 21590 posts, RR: 59
Reply 15, posted (7 years 4 months 1 week 3 days 12 hours ago) and read 5723 times:

Quoting Mariner (Reply 5):
The fall-off in EADS may be slightly greater



Quoting Atmx2000 (Reply 8):
Comparing to the S&P, the drop appears to start somewhat early and appears to be steeper. Compared to Boeing, the drop starts way earlier.



Quoting Mariner (Reply 13):
But - each to their own, always.

But while it "mirrors" it, it's by a factor of 2-4x! That isn't explained by the correction in general. But since the correction hit "risky" investments most, what it does say is EADS was riskier than the DAX, S&P, DJ Transportation Index, and Boeing in comparison.

Why should that be dismissed? If EADS were just performing like everyone else, it would be down 3-6%, or everyone else would be down 12% like EADS...



Of all the things to worry about... the Wookie has no pants.
User currently offlineMariner From New Zealand, joined Nov 2001, 25709 posts, RR: 85
Reply 16, posted (7 years 4 months 1 week 3 days 11 hours ago) and read 5672 times:
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Quoting Ikramerica (Reply 15):
what it does say is EADS was riskier than the DAX,

Certainly, it is. Many of the DAX stocks do not have problems of currency conversion, for example.

Quoting Ikramerica (Reply 15):
Why should that be dismissed?

Who's dismissing it? It fell.

As did many blue chip stocks over the past few weeks. Several stock market indices lost 10%. Several moderately important hedge funds went belly up. Many believed a credit crunch looming.

The US Fed thought the crisis was severe enough to lower the interest rate.

So I don't necessarily assume that the fall in price of EADS stock was entirely attributable to what is happening at the company - known or unknown.

mariner



aeternum nauta
User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 17, posted (7 years 4 months 1 week 3 days 11 hours ago) and read 5612 times:

Quoting AirFrnt (Thread starter):
Has anyone noticed that the bottom seems to have dropped out of the EADS stock?

That's an overstatement. EADS' price has fallen by less than half.

The main causes appear to be:
- general softness in the european markets
- lack of confidence that Power8 will be fully implemented, and
- realization that, with 71 net sales in 68 months, the WhaleJet will never come close to break even.

Quoting NAV20 (Reply 14):
Some investors may not be happy in principle with the idea of hiving off plants (and therefore future profits). Alternatively, they may not be happy with the prospect that a lot of them might be bought by a single (privately-owned) firm.

EADS investors would be very unhappy with the prospect of a single entity owning so many plants that would be supplying them. The investors would not want to pay monopoly rents.

Quoting Mariner (Reply 16):
I don't necessarily assume that the fall in price of EADS stock was entirely attributable to what is happening at the company - known or unknown.

The fall in the price of EADS stock is not attributable entirely either to EADS or the general markets. It is clearly a combination of both.


User currently offlineMariner From New Zealand, joined Nov 2001, 25709 posts, RR: 85
Reply 18, posted (7 years 4 months 1 week 3 days 10 hours ago) and read 5554 times:
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Quoting Zvezda (Reply 17):
The fall in the price of EADS stock is not attributable entirely either to EADS or the general markets. It is clearly a combination of both.

That is part of the point I was making.

However, these are extraordinary times. Continental Airlines fell 17% in a single day last week.

There was no "bad news" to precipitate it, and there has been none since. No analyst that I have read has been able to explain it.

mariner



aeternum nauta
User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10253 posts, RR: 97
Reply 19, posted (7 years 4 months 1 week 3 days 10 hours ago) and read 5539 times:
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Quoting Zvezda (Reply 17):
That's an overstatement. EADS' price has fallen by less than half.

12% during a period of major market turbulence to be precise

Quoting TKV (Reply 9):
The reasons of such decline I will address them separately

Thank goodness - now I can sack my financial advisor  Yeah sure

Quoting Zvezda (Reply 17):

- general softness in the european markets
- lack of confidence that Power8 will be fully implemented, and
- realization that, with 71 net sales in 68 months, the WhaleJet will never come close to break even.

First two sound plausible...
So the markets woke up to the A380 issues THIS WEEK eh?  no 
Try about 2 years ago..............
Still, you can't let a good opportunity go by.........

Quoting AirFrnt (Thread starter):
Is there bad news lurking in the wings?

I'm sure with all the desperate searching, if there is, it'll be found.
If there's no bad news, there's always plan B
Regards


User currently offlineZvezda From Lithuania, joined Aug 2004, 10511 posts, RR: 64
Reply 20, posted (7 years 4 months 1 week 3 days 10 hours ago) and read 5506 times:

Quoting Astuteman (Reply 19):
So the markets woke up to the A380 issues THIS WEEK eh? no
Try about 2 years ago..............
Still, you can't let a good opportunity go by.........

EADS has been generally falling for a couple of years now, not just two weeks. The last two weeks manifest a small correction compared to e.g. Spring 2006.


User currently offlineAirFrnt From United States of America, joined Jul 2004, 2830 posts, RR: 42
Reply 21, posted (7 years 4 months 1 week 3 days 5 hours ago) and read 5300 times:

Quoting Zvezda (Reply 17):
That's an overstatement. EADS' price has fallen by less than half.

My point is that it is challenging the lows around the 380 announcements. That's despite a huge amount of capital that state banks around the world have been pushing in.

Quoting Astuteman (Reply 19):

I'm sure with all the desperate searching, if there is, it'll be found.

That was uncalled for. I am asking this question as a financial matter. I would ask exactly the same question of Boeing if it's stock was around 20 right now.


User currently offlineSabenapilot From Belgium, joined Feb 2000, 2728 posts, RR: 46
Reply 22, posted (7 years 4 months 1 week 3 days 5 hours ago) and read 5249 times:

One can proof any trend if one takes only a short period; I suggest however you all have a look at this 5 year chart to put the 'low" in perspective:

long term view on EADS share price


[Edited 2007-08-21 15:08:00]

User currently offlineCygnusChicago From United States of America, joined Mar 2007, 758 posts, RR: 1
Reply 23, posted (7 years 4 months 1 week 3 days 4 hours ago) and read 5157 times:

Quoting Ikramerica (Reply 15):
But while it "mirrors" it, it's by a factor of 2-4x! That isn't explained by the correction in general

Actually, it is - that's probably EADS' Beta, a measure of the stock's sensitivity to market movements. As a standalone stock, EADS currently has a higher risk than the market. So, when we see a certain degree of volatility on the market, EADS will experience Beta-times that volatility.

The underlying question is why EADS hasa high Beta? Well, no one can say for sure, and anyone who can will quickly be a multi-billionaire. However, we can guess. My guesses and line of thinking include:

- There is an expected global economic slowdown approaching, leading to lower yields on airlines
- This will lead to tighter credit, which in turn will hit airline expansion plans really hard
- A lot of Airbus' business is in single-aisle jets for new or expanding careers, while the A330s are mainly interim lift, and as a result these kinds of orders may see deferrals or cancellations in a slowdown
- Boeing, on the other hand, has a fair amount of orders tied up in long term replacement aircraft in the form of the 787 orders, and may thus be less riskier in a slowdown.



If you cannot do the math, your opinion means squat!
User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 59
Reply 24, posted (7 years 4 months 1 week 3 days 3 hours ago) and read 4797 times:

Quoting Sabenapilot (Reply 22):
One can proof any trend if one takes only a short period; I suggest however you all have a look at this 5 year chart to put the 'low" in perspective:

..sure.. Smile

Comparison with its peers is important..while one stock is up 50% while the other stock is up around 200%






"Up the Irons!"
25 Zvezda : Yes, but to put it in perspective requires comparing it against competitors and against the indices.
26 FAEDC3 : Markets had been trying to correct themselves during last week, I think that eventhough EADS stock has shown to be affected as most of the rest blue c
27 Post contains images Asteriskceo : Not to me. On some occasions the share traders are the first to know.
28 Post contains images CygnusChicago : Well, let's put the entire picture down. Five year chart shows what we all know: A380 delays caused market value erosion. Wow. What a surprise! Now l
29 Astuteman : Your comments make much more sense, now. Apologies. I'm sure you would. I would too. Boeing has been trading at c. $100 recently. $20 would definitel
30 Post contains images Jacobin777 : ......the problem with the A380 was roughly 2 1/2 years ago..not five years ago, so I don't get your point.. 5 years is a good time from from most po
31 Gbfra : Long-term comparisons of EADS (quoted in Euros) and Boeing (quoted in Dollars) share prices should include exchange-rate variations. Do they?
32 CygnusChicago : EADS was up 275% when the A380 issues hit. Value hasn't eroded since then. The point is, there is no sinister trend in EADS stock. The market revalue
33 Jacobin777 : ....I didn't include exchange-rate variations as EADS would basically be invested my Europeans and Boeing would mostly be invested by this side of th
34 TKV : Yes, you are right om that. But referred to my post Reply 9, there was no material exchange valuation between August20 and June 15, the comparisons a
35 Rbgso : They're sellling A320s and A330s like mad. Cash flow has stabilized. Sure the A380 may have been a drag earlier, but those problems appear to be behin
36 TKV : [quote=Rbgso,reply=35]Reply 35 I would basically agree with you, with two caveats: 1) The A320, in spite of the large sales, has a razor thin mark up
37 CygnusChicago : Can you provide evidence of this "razor thin mark up"?
38 Zvezda : The enormous order backlogs provide evidence to the contrary. The narrow-body market has been a seller's market for the last few years.
39 Gbfra : Correct. This is the reason why the operational margin of Airbus for the first half of 2007 was higher than expected by many financial analysts.[Edit
40 Post contains images Glideslope : LOL, you've got that right brother. The Cat always sneaks through the fence as the tree comes down.
41 Post contains images Astuteman : Come on - we're always being told the widebodys are being given away - the profits have to come from somewhere. If you took 2006's exceptional write-
42 Sllevin : The simple answer for the decline is fear of future credit issues. Should EADS have to go the conventional credit route for capital (which they have l
43 Ikramerica : $20 was the wrong number to choose. $40 was the right number. Boeing would have to be trading at $40 now to be in the same circumstance as EADS, whic
44 Gbfra : I don't think so. EADS/Airbus have a strong cash position at the moment and the bulk of development costs for the A350 will fall into the 2010-2013 t
45 FAEDC3 : It really amazes me how people here write with so much assurance as if they had seen the financial statements, which I would recommend doing. EADS has
46 TKV : The operating profit has little to do with the cash position, as ithe latter can be improved by bank loans, non-cash payment of supplies, sale of ass
47 Post contains images Jacobin777 : ..hence my comments below... ...that being said, my comment was in reference to investing either in Boeing or EADS... ...thanks for the kind words...
48 Justloveplanes : My two cents is that Airbus has had a specific correction attributable not so much to the delay in Power 8, but the reason for the delay. As long as
49 Sllevin : Not exactly. While there may be a short term crisis, it's clear that the long term will not be as rosy as the past five or six years (where the cost
50 NAV20 : Mystified by those comments, guys? The obvious question is, "WHAT profits?" EADS made a profit of only E99.00M. last year. That represented 9 cents p
51 Post contains images CygnusChicago : Um, no, they don't. Also, not so sure about your numbers: 2007Q2: EBIT = 278 million Euro Net profit = 81 million Euro EBIT is the number that matter
52 Post contains images Astuteman : A compliment? That is indeed just what EADS have done..... It's amazing what reading the rest of the post can do for one's understanding...... Regard
53 AirFrnt : Tell that to the .COM companies. There is a reason it's illegal to report your primary financial under SOX in EBITDA. It's one of the very good thing
54 Post contains images NAV20 : Do you run your own finances on that basis, Cygnus? Spend everything you 'earn before interest and tax'? You must be deeply in debt if you do.   Min
55 Ikramerica : ??? We are being told to look longer term, so that's what I did. Longer term, EADS has gone absolutely nowhere, while Boeing is up from 40 to 100. So
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