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Bull of the Day: Safran (SAFRY)

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Safran ((SAFRY - Free Report) ), a global aerospace and defense technology leader based in France, stands out as a rare long-term outperformer in the European equities landscape. The company specializes in aircraft propulsion, equipment, and defense systems, boasting strong competitive advantages through its technological expertise, deep relationships with global aerospace manufacturers, and exposure to high-barrier-to-entry markets. Safran’s durable business model is backed by significant aftermarket services revenue, which provides a steady and recurring cash flow base.

This year, the stock has surged 33%, handily outperforming both the broader European indices and US benchmarks. Its ascent is supported by two powerful macro tailwinds: the migration out of US dollar-denominated assets and renewed investor interest in European defense names, especially in light of shifting geopolitical priorities across the EU.

What’s more, Safran’s long-term track record is equally impressive. Over the past decade, the stock has compounded at an annual rate of 15.1%, consistently outperforming major global benchmarks, even as European equities as a whole have struggled to keep pace with their U.S. counterparts.

With strong price momentum, secular defense tailwinds, and a Top Zacks Rank to back it up, Safran is positioned as a very compelling investment opportunity going forward.

Zacks Investment Research
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Safran Stock Rises as Analysts Raise Forecasts

As European defense budgets continue to surge, it's no surprise that analysts are taking a more bullish stance on key players in the region and Safran is at the top of that list. The company is widely viewed as a strategic beneficiary of the EU’s renewed commitment to defense modernization and autonomy, particularly amid heightened geopolitical uncertainty and shifting NATO dynamics.

Reflecting this favorable outlook, analysts have been steadily raising their earnings forecasts. Over the past 30 days, consensus estimates for Safran’s current-year earnings have climbed by 5.45%, while projections for 2026 have increased by 4.87%. These upward revisions give Safran it Zacks Rank #1 (Strong Buy) rating, signaling improving earnings momentum and growing confidence in the company's ability to capitalize on structural tailwinds in aerospace and defense.

Upward earnings revisions like these are often one of the most powerful catalysts for stock performance, and in Safran’s case, they reinforce the company’s position as a core holding for investors seeking exposure to both high barrier to entry aerospace manufacturers and long-term defense growth.

Zacks Investment Research
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SAFRY Shares Have Rerated to a Premium Valuation

Safran shares have clearly rerated higher, now trading at a forward earnings multiple of 34.7x, which is well above their 10-year median of 26.5x. While that might seem elevated at first glance, the valuation premium appears more justified in light of the sweeping geopolitical shifts driving defense spending across Europe.

Importantly, this rerating isn’t unique to Safran. The broader aerospace and defense industry is also seeing multiple expansion, with the sector average forward P/E climbing to 28.2x, also significantly above its long-term median of 21.7x. This signals a revaluation by the market, as investors increasingly favor companies with durable competitive advantages and exposure to rising global defense budgets.

Adding to Safran’s investment appeal is its robust earnings growth outlook. The company is expected to grow earnings at an annual rate of 19.5%, further supporting the case for its premium valuation and underscoring the company’s long-term potential in both commercial aerospace and defense markets.

Zacks Investment Research
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Should Investors Buy Shares in SAFRY?

Safran offers a rare blend of strong fundamentals, thematic tailwinds, and consistent execution. With rising earnings estimates, top-tier growth potential, and a strategic foothold in both commercial aerospace and defense, SAFRY remains a high-conviction idea, despite its premium valuation. For investors seeking long-term exposure to Europe’s industrial resurgence and defense rearmament, Safran is a name worth owning.


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