Franco-Dutch airline giant Air France-KLM's share price is down 1.5 percent on the stock exchange after Morgan Stanley lowered its recommendation to underweight and reduced its price target from 9.40 to 7.10 euros. This is reported by Bloomberg News, which has seen an analysis.
The reason is that Air France-KLM is considered to have challenging market exposure compared to comparable companies and that net debt is expected to increase next year.
”The shares are not expensive relative to history – which is the case for the entire sector – but the stock is trading at a significant premium compared to its large-cap peers, while the outlook for free cash flow looks very challenging to us,” write Morgan Stanley.
Meanwhile, German Lufthansa is rising by 0.8 per cent, which despite the company presenting a weak result, shows signs of stabilisation.
Morgan Stanley's analysts have changed their valuation method for the sector and are now focusing on EV/EBIT rather than EV/EBITDA, making Air France-KLM and Wizz Air look expensive, and IAG less so.
On 3 October 2023, it became public that Air France-KLM, along with investment firm Castlelake, Danish financier Henrik Lind, and the Danish state, had taken over the airline SAS.
Source: FinWire-DI.SE
