AIR France KLM (AF) AI Stock Analysis

• Market Cap: €2.96B
• Dividend Yield: N/A
• Average Volume (3M): 1.01M
• Price to Earnings (P/E): 3.3
• Beta (1Y): 1.50
• Revenue Growth: 5.52%
• EPS Growth: 1001.19%
• Country: FR
• Employees: 78,399
• Sector: General
• Sector Strength: N/A
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 1.69
• Shares Outstanding: 262,769,870
• 10 Day Avg. Volume: 1,113,403
• 30 Day Avg. Volume: 1,005,345
• PEG Ratio: -0.09
• Price to Book (P/B): -1.21
• Price to Sales (P/S): 0.07
• P/FCF Ratio: -9.19
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €11.39
• Price Target Upside: -0.52% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: €10.50 ▼(-8.30% Downside)

Air France-KLM's stock score is primarily influenced by its strong revenue growth and undervaluation, despite significant financial challenges and bearish technical indicators. The company's high leverage and negative equity pose risks, but its low P/E ratio suggests potential value for investors willing to accept these risks.

Positive Factors

Revenue Growth

The robust rebound in revenue indicates a strong recovery in the airline industry, suggesting increased demand and effective market positioning.

Operating Margins

Improved gross profit margins reflect better cost management, enhancing the company's ability to sustain profitability over the long term.

Cash Flow Generation

Improved operating cash flow indicates effective cash generation, supporting the company's operational needs and potential for debt reduction.

Negative Factors

High Leverage

High leverage and negative equity pose financial instability risks, potentially impacting the company's ability to meet long-term obligations.

Free Cash Flow Volatility

Volatile free cash flow limits the company's ability to invest in expansion or reduce debt, affecting long-term financial health.

Low Net Profit Margin

A low net profit margin indicates profitability challenges, suggesting the need for further operational efficiency improvements to enhance earnings.

AIR France KLM Business Overview & Revenue Model

Company Description

Air France-KLM SA, together with its subsidiaries, provides passenger and cargo transportation services on scheduled flights in Metropolitan France, Benelux, rest of Europe, and internationally. The company operates through Network, Maintenance, Transavia, and Other segments. It also offers airframe and engine maintenance services; component support services comprising electronic, mechanical, pneumatic, hydraulic, etc.; and other services, as well as operates point-to-point flights to/from the Netherlands and France. As of December 31, 2021, it operated a fleet of 332 aircraft. The company was founded in 1919 and is headquartered in Paris, France.

How the Company Makes Money

AIR France KLM generates revenue primarily through passenger ticket sales, which constitute the bulk of its income. The company operates various fare classes for both economy and business travelers, allowing it to cater to different segments of the market. In addition to passenger services, the airline also earns revenue from cargo services, providing freight transport solutions for goods and commodities. Ancillary revenue streams, including fees for baggage, seat selection, and in-flight services, contribute significantly to its earnings. Furthermore, partnerships and alliances with other airlines, such as the SkyTeam alliance, enhance connectivity and expand its market reach, while codeshare agreements enable the airline to offer a broader range of destinations. The company also benefits from frequent flyer programs, generating loyalty and repeat business among travelers.

AIR France KLM Financial Statement Overview

Summary

Air France-KLM shows strong revenue growth and improved operating margins, but faces significant financial challenges with high leverage and negative equity. Cash flow generation is improving, but free cash flow volatility remains a concern.

Income Statement

Air France-KLM has shown a strong recovery in revenue with a TTM growth rate of 72.4%, indicating a robust rebound in the airline industry. The gross profit margin improved to 22.8% in the TTM, reflecting better cost management. However, the net profit margin remains low at 3.2%, suggesting profitability challenges. The EBIT and EBITDA margins have improved, but still indicate room for further operational efficiency improvements.

Balance Sheet

The balance sheet shows significant leverage, with a negative equity position and a high debt-to-equity ratio of -15.69 in the TTM. This indicates financial instability and potential risks in meeting long-term obligations. The return on equity is negative, reflecting challenges in generating returns for shareholders. The equity ratio is also negative, highlighting a weak financial structure.

Cash Flow

Operating cash flow has improved, but free cash flow remains volatile with a negative growth rate of -17.6% in the TTM. The operating cash flow to net income ratio is healthy at 0.27, indicating good cash generation relative to net income. However, the free cash flow to net income ratio is low at 0.18, suggesting limited cash available for expansion or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.70B	31.46B	30.02B	26.39B	14.31B	11.09B
Gross Profit	6.55B	4.99B	6.17B	7.97B	3.10B	1.00M
EBITDA	5.30B	4.02B	4.64B	3.73B	-371.00M	-3.65B
Net Income	962.00M	317.00M	934.00M	728.00M	-3.27B	-7.03B
Balance Sheet
Total Assets	38.53B	36.16B	34.49B	32.30B	30.68B	30.21B
Cash, Cash Equivalents and Short-Term Investments	5.01B	5.98B	7.38B	7.23B	6.80B	6.71B
Total Debt	16.50B	14.53B	13.53B	14.71B	16.24B	18.75B
Total Liabilities	37.90B	35.36B	33.99B	34.78B	34.50B	35.63B
Stockholders Equity	-1.49B	-1.76B	-2.05B	-3.00B	-3.82B	-5.43B
Cash Flow
Free Cash Flow	739.00M	-232.00M	-426.00M	1.88B	-668.00M	-4.92B
Operating Cash Flow	4.88B	3.50B	3.13B	4.86B	1.53B	-2.83B
Investing Cash Flow	-2.81B	-2.77B	-3.24B	-2.15B	-1.24B	-1.58B
Financing Cash Flow	-1.61B	-2.11B	-285.00M	-2.76B	-77.00M	7.15B

AIR France KLM Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:AF, the sentiment is Positive. The current price of 11.45 is above the 20-day moving average (MA) of 10.95, above the 50-day MA of 11.13, and above the 200-day MA of 10.90, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 57.52 is Neutral, neither overbought nor oversold. The STOCH value of 93.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:AF.

AIR France KLM Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AIR	68 Neutral	$153.39B	30.21	22.66%	1.53%	7.05%	54.98%
SAF	67 Neutral	€124.34B	29.24	35.36%	0.97%	14.19%	161.87%
AI	66 Neutral	€92.18B	26.83	13.92%	2.06%	1.46%	12.62%
RXL	65 Neutral	€10.67B	43.44	4.63%	3.61%	2.16%	-64.02%
RNO	63 Neutral	€9.23B	-0.71	-46.54%	6.19%	8.44%	-937.75%
AF	57 Neutral	€2.96B	3.32	―	―	5.52%	1001.19%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%