After the sharp drop in the Airbus share price over the past few weeks, this could be a good time to invest in the share. With bonus certificates with a cap, investors can achieve returns in the double-digit percentage range.
Airbus shares, Europe's largest aerospace company and one of the world's largest defense companies, have been in a clear downward trend for the past month. While the share was still above EUR 110 on August 17, 2022, it was temporarily trading 17 percent lower at EUR 91 on September 21, 2022.
Although Airbus did not receive any new orders in August and Qatar Airways canceled the order for 19 large aircraft, experts with price targets of up to EUR 175 (JP Morgan Chase) reiterated their buy recommendation for the share.
The investment idea
At the discounted level, now could be a good time to invest in Airbus stock, which is classified as slightly undervalued. If you want to significantly reduce the risk of buying shares directly and still want to achieve returns above the high inflation rate, you could consider investing in a bonus certificate with a cap.
Apart from dividend payments, private investors can only achieve positive returns when buying a share directly if the price rises. Compared to direct share purchases, bonus certificates with and without a cap offer investors opportunities for annual returns in the double-digit percentage range not only when the share price rises, but also when prices stagnate or fall.
The way it works
If the Airbus share never touches or falls below the barrier of EUR 58 by the valuation date of the certificate, then the bonus certificate will be repaid on September 22, 2023 with the bonus level of EUR 108.
The key data
The HSBC bonus certificate with a cap (ISIN: DE000HG5HU33) on the Airbus share has a bonus level and a cap of EUR 108. The cap defines the maximum repayment amount of the certificate. The barrier activated until the valuation date, September 15, 2023, is EUR 58. With the Airbus share price of EUR 95.33, investors could buy the certificate for EUR 96.70.
The chance
Since the certificate is currently priced at EUR 96.70, it enables a gross return of 11.69 percent in twelve months if the share price never falls by 39.16 percent to EUR 58 or below by the valuation date.
The Risks
If the Airbus share loses more than a third of its value by the valuation day and touches the barrier at EUR 58 and the share is listed below the cap on the valuation day, the certificate is redeemed at the closing price of the share determined on the valuation day. If this price is found below EUR 96.70, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell Airbus shares or investment products based on Airbus shares. No liability is assumed for the correctness of the data.
