AIR France KLM (AF) AI Stock Analysis

• Market Cap: €2.97B
• 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: Industrials
• Sector Strength: 72
• 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: €11.46
• Price Target Upside: 0.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 57 Neutral
• Price Target: €10.50 ▼(-7.57% 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 signs of recovery with improving revenue and profitability metrics. However, high leverage and negative equity pose significant financial risks. The company needs to focus on strengthening its balance sheet while maintaining cash flow improvements.

Income Statement

The income statement shows a positive trend with revenue growth and improving margins. The TTM data indicates a gross profit margin of 22.76% and a net profit margin of 3.18%, which are improvements over previous years. However, the airline industry faces challenges with fluctuating fuel costs and economic conditions, which can impact profitability.

Balance Sheet

The balance sheet reveals significant leverage with a high debt-to-equity ratio of -15.69 in the TTM period, indicating financial risk. The negative stockholders' equity suggests potential solvency issues. Despite this, the company has managed to reduce its debt over time, which is a positive sign.

Cash Flow

Cash flow analysis shows strong free cash flow growth of 290% in the TTM period, indicating improved cash generation. However, the free cash flow to net income ratio is relatively low at 18.41%, suggesting limited cash conversion efficiency. The operating cash flow to net income ratio is also modest at 26.53%.

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: Neutral
• Last Price: 11.36
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:AF, the sentiment is Neutral. The current price of 11.36 is below the 20-day moving average (MA) of 11.52, above the 50-day MA of 10.93, and above the 200-day MA of 10.62, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 49.02 is Neutral, neither overbought nor oversold. The STOCH value of 41.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	$170.25B	33.53	22.66%	1.53%	7.05%	54.98%
SAF	67 Neutral	€130.56B	30.70	35.36%	0.97%	14.19%	161.87%
AI	66 Neutral	€91.81B	26.72	13.92%	2.06%	1.46%	12.62%
RXL	65 Neutral	€9.71B	39.53	4.63%	3.61%	2.16%	-64.02%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RNO	63 Neutral	€9.79B	-0.79	-46.54%	6.19%	8.44%	-937.75%
AF	57 Neutral	€2.97B	3.30	―	―	5.52%	1001.19%