Stock Analysis & Valuation Latécoère S.A. (LAT.PA)

• Previous Close: €0.02
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	27.48	160602
Intrinsic value (DCF)	0.09	426
Graham-Dodd Method		n/a
Graham Formula		n/a

Strategic Investment Analysis

Company Overview

Latécoère S.A. (LAT.PA) is a leading French aerospace and defense company specializing in aerostructures and interconnection systems. Founded in 1917 and headquartered in Toulouse, France, Latécoère designs, manufactures, and supports critical aircraft components, including fuselage sections, doors, tail cones, and electrical harnesses for the aeronautics, defense, and space sectors. The company operates globally, serving major aerospace OEMs with high-precision engineering solutions. As a subsidiary of SCP SKN HOLDING I SAS, Latécoère plays a vital role in the aerospace supply chain, leveraging its expertise in lightweight materials and advanced avionics. With a strong presence in Europe, the U.S., Africa, and Asia, Latécoère remains a key player in the industrials sector, contributing to next-generation aircraft development and sustainability initiatives in aviation.

Investment Summary

Latécoère presents a high-risk, high-reward investment opportunity in the aerospace sector. The company's revenue of €705.8M (FY 2024) is offset by a net loss of €-61.9M, reflecting industry-wide supply chain challenges and post-pandemic recovery pressures. Its beta of 1.115 indicates higher volatility than the market, aligning with cyclical aerospace trends. While negative operating cash flow (-€16.3M) and significant debt (€260.2M) raise liquidity concerns, Latécoère’s niche expertise in aerostructures and long-standing OEM relationships provide recovery potential. Investors should monitor restructuring efforts, defense contract wins, and commercial aviation demand before considering exposure.

Competitive Analysis

Latécoère competes in the highly specialized aerospace components market, where scale, technological expertise, and OEM relationships determine success. The company’s competitive advantage lies in its integrated aerostructures and electrical systems capabilities, serving Airbus, Boeing, and other Tier 1 suppliers. However, its smaller scale compared to global rivals limits pricing power and R&D investment. Latécoère’s focus on fuselage components and interconnection systems differentiates it from pure-play aerostructure firms, but reliance on commercial aviation exposes it to cyclical downturns. The company’s French base provides access to EU defense contracts, yet high labor costs and debt burden constrain margins. Competitors with diversified portfolios (e.g., Safran in propulsion) or lower-cost manufacturing (e.g., Spirit AeroSystems) pose significant threats. Latécoère’s turnaround hinges on operational efficiency, debt management, and capturing growth in next-gen aircraft programs like Airbus A320neo and Boeing 787.

Major Competitors

• Safran S.A. (SAF.PA): Safran dominates aerospace propulsion and equipment, with scale advantages in engines (LEAP) and landing systems. Its vertical integration and defense exposure reduce cyclical risks compared to Latécoère. However, Safran’s broader focus limits its specialization in aerostructures.
• Spirit AeroSystems Holdings, Inc. (SPR): Spirit is a global leader in aerostructures (e.g., Boeing fuselages), with greater revenue diversification and U.S. cost advantages. Its Boeing dependence mirrors Latécoère’s Airbus reliance, but Spirit’s larger backlog and restructuring progress may offer better near-term stability.
• Heico Corporation (HEI): Heico excels in aftermarket aerospace components with a high-margin, acquisitive model. Its focus on FAA-approved parts and M&A agility contrasts with Latécoère’s OEM-heavy, capital-intensive approach. Heico’s lower debt and consistent profitability make it a formidable competitor.
• Melrose Industries PLC (GKN Aerospace) (GKN.L): GKN Aerospace, under Melrose, rivals Latécoère in aerostructures and electrical systems, with stronger positioning in wing technologies. Its UK base and restructuring post-Melrose acquisition provide cost synergies, but Brexit-related uncertainties persist.
• Ducommun Incorporated (DCO): Ducommun’s niche in complex aerospace assemblies and defense contracts overlaps with Latécoère’s interconnection systems. Its smaller size allows agility, but Latécoère’s Airbus relationship provides steadier demand. Ducommun’s U.S. defense focus mitigates commercial aviation volatility.