Kepler Cheuvreux raised its rating on Air France‑KLM from Reduce to Hold on Tuesday, stating that the airline’s share price has reached the broker’s €11.50 fair‑value target. The analyst team noted that the earlier downgrade, issued about a month earlier, was based on a view that the share price was "somewhat ambitious" following the onset of the Iran crisis. Since that downgrade, the stock has fallen roughly 12%, bringing it in line with the target price, and it subsequently rose about 2% in early Paris trading after the upgrade.
Kepler’s revised model incorporates the carrier’s second‑quarter results, leading to a 20% increase in its current‑year profit estimate while only modestly adjusting its mid‑term outlook by about 1%. The upward revision is primarily driven by a more moderate forecast for jet fuel prices. Despite the increase, Kepler’s profit forecasts remain slightly below the Visible Alpha consensus by a low‑ to mid‑single‑digit percentage.
Air France‑KLM reported adjusted operating profit of €484 million for Q2, down from €736 million a year earlier but comfortably above the €327 million consensus figure supplied by analysts polled by the company. The carrier also trimmed its full‑year capacity guidance, now expecting a 1% decline in short‑ and medium‑haul flight capacity, while projecting overall group revenue growth of between 2% and 3%. This represents the second reduction in its outlook, the first having cut the growth forecast from 3‑5% to the current range after the Middle East conflict escalated in February.
KLM Chief Executive Marjan Rintel commented that global uncertainty, rising costs and heightened competition remain structural challenges for the airline, with the Iran war adding further pressure on its finances. He noted that airlines worldwide are attempting to capitalize on the more profitable summer travel season to strengthen balance sheets before a tougher second half of the year.