Rothschild Redburn cut Airbus to Neutral, citing execution risks on the A320neo and A350 programs that outweigh strong demand. The brokerage lowered its target price to €200 from €230, citing fresh operational setbacks including a December fuselage panel quality issue and supply shortages affecting the PW1100G engine. These issues cloud 2026 and 2027 delivery outlooks.

Airbus guided for 870 deliveries in 2026 and a 70-75 monthly A320 production rate by 2027 end. Rothschild's 2026 forecast of 872 aircraft aligns with guidance but lags buy-side expectations. The brokerage flagged engine supplier Pratt & Whitney's lack of firm commitments and warned the supply chain cannot yet sustain the higher rates targeted. Airbus is unlikely to reach 75 monthly A320s before 2029.

The downgrade also slashed Airbus EBIT estimates by 12-16% through 2029 and free cash flow by 27% in 2026. Analysts see less profit and cash flow due to lower deliveries and higher costs. While trading on a 5.9% free cash flow yield, the valuation doesn't fully compensate for the risks. Rothschild said it would revisit the case once production risks are resolved.