El Al (ELAL) AI Stock Analysis

• Market Cap: ₪8.43B
• Dividend Yield: N/A
• Average Volume (3M): 2.62M
• Price to Earnings (P/E): 5.6
• Beta (1Y): 0.20
• Revenue Growth: 1.56%
• EPS Growth: -28.04%
• Country: IL
• Employees: 3,013
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 29.30
• Shares Outstanding: 567,940,600
• 10 Day Avg. Volume: 3,247,392
• 30 Day Avg. Volume: 2,623,762
• PEG Ratio: -0.15
• Price to Book (P/B): 2.58
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 3.56
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: 1,718.00 ▼(-4.29% Downside)
• Action: Upgraded Date: 03/01/26
• Date: Action: Upgraded 03/01/26

The score is driven primarily by solid financial performance (profitability, restored equity, and strong cash generation) and an attractive valuation (low P/E with a meaningful dividend). These positives are tempered by weak technical momentum and some signs of normalization versus 2024 (lower margins and slightly weaker cash flow).

Positive Factors

Core scheduled air travel business

As Israel's established scheduled carrier, El Al benefits from a durable route network, brand recognition and steady demand for core passenger services. This business model creates recurring cash flow opportunities from fares, ancillary services and cargo across domestic and international routes.

Improving leverage profile

The marked reduction in debt-to-equity indicates meaningful deleveraging, improving financial flexibility and lowering interest burden. Sustained lower leverage increases resilience to demand volatility, supports refinancing capacity and frees cash for strategic investments over months to years.

Healthy operating margins

Robust gross, EBIT and EBITDA margins relative to the industry point to operational efficiency and pricing power. These margins enhance the company's ability to absorb fuel and cost shocks, sustain profitability, and reinvest in fleet or routes, supporting medium-term competitive positioning.

Negative Factors

Negative free cash flow growth

A sustained decline in free cash flow growth reduces the firm's ability to self-fund capex, service debt or build reserves. Over several quarters this can force external financing, constrain strategic spending, and heighten liquidity risk in a capital-intensive, cyclical airline industry.

Low equity ratio

A low equity ratio signals heavy reliance on debt financing, leaving limited capital buffer against shocks. In an industry exposed to demand swings and rate moves, this structural leverage increases solvency risk and can amplify the impact of downturns on long-term operations and financing costs.

Declining EPS growth

A steep decline in EPS growth suggests pressure on per-share profitability, potentially from dilution, cost pressures or uneven revenue mix. If persistent, falling EPS constrains retained earnings, weakens reinvestment capacity, and can signal structural earnings volatility to stakeholders.

El Al Business Overview & Revenue Model

Company Description

El Al Israel Airlines Ltd., together with its subsidiaries, provides passengers and cargo transportation services. The company operates flights on passenger aircraft to approximately 40 direct destinations in 26 countries in Europe, the United States and Canada, the Far East, Central Asia, and South Africa. It also offers aircraft maintenance services in airport; sells duty-free products; manages travel agencies; and produces and supplies prepared kosher meals to airlines. In addition, the company provides catering services to institutions; and markets tour packages and airline tickets to travel agents and individual passengers, as well as operates various restaurants. El Al Israel Airlines Ltd. was incorporated in 1948 and is based in Lod, Israel.

How the Company Makes Money

El Al generates revenue primarily through the sale of passenger tickets and cargo services. The airline's main revenue stream comes from its passenger operations, where it offers both economy and premium class services. Additional revenue is derived from cargo transportation, which includes shipping goods internationally. The company also monetizes ancillary services, such as seat selection, extra baggage fees, and in-flight purchases. Partnerships with travel agencies and alliances with other airlines enhance its market reach and contribute to its earnings. Furthermore, El Al has loyalty programs that encourage repeat business, which plays a significant role in its financial performance.

El Al Financial Statement Overview

Summary

Strong post-pandemic profitability and robust operating/free cash flow, with positive equity restored. Offsetting this, margins cooled from 2024 to 2025, cash flow declined year-over-year, and leverage remains meaningful (debt-to-equity ~1.68).

Income Statement

Profitability has improved materially versus 2020–2021 losses, with solid 2025 revenue growth (8.3%) and strong 2025 margins (gross margin ~36%, operating margin ~16.5%, net margin ~11.6%). However, earnings power appears to have cooled from 2024 to 2025 as operating and net margins stepped down (2024 net margin ~15.8% vs. 2025 ~11.6%), suggesting higher costs and/or normalization from an unusually strong 2024.

Balance Sheet

The balance sheet has clearly repaired from negative equity in 2020–2023 to positive equity in 2024–2025, which is a major de-risking. Leverage remains meaningful for an airline: 2025 debt-to-equity is ~1.68 (improved from ~2.80 in 2024), implying continued sensitivity to demand shocks, fuel costs, and interest rates. Total debt also increased in 2025 versus 2024, partially offsetting the benefit of higher equity.

Cash Flow

Cash generation is strong: 2025 operating cash flow (~1.13B) and free cash flow (~0.76B) were both solid and free cash flow covered a meaningful portion of earnings (free cash flow to net income ~0.67). That said, 2025 cash flow declined versus 2024 (free cash flow growth -2.8%), and cash conversion weakened compared with the prior year (2024 free cash flow to net income ~0.86), indicating less favorable working-capital or capex dynamics.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.76B	3.43B	2.50B	1.99B	857.17M
Gross Profit	1.36B	962.60M	396.00M	309.37M	-103.31M
EBITDA	917.72M	1.06B	509.20M	326.70M	-84.10M
Net Income	436.56M	541.40M	112.60M	108.70M	-413.04M
Balance Sheet
Total Assets	5.00B	4.38B	3.32B	3.19B	2.83B
Cash, Cash Equivalents and Short-Term Investments	1.99B	1.40B	405.70M	283.42M	90.53M
Total Debt	1.77B	1.53B	1.91B	2.09B	2.19B
Total Liabilities	3.95B	3.85B	3.53B	3.54B	3.38B
Stockholders Equity	1.05B	545.90M	-187.30M	-320.88M	-549.49M
Cash Flow
Free Cash Flow	762.17M	1.24B	324.70M	246.76M	-21.11M
Operating Cash Flow	1.13B	1.45B	455.50M	312.89M	-558.00K
Investing Cash Flow	-980.72M	-1.11B	-174.50M	-59.49M	7.94M
Financing Cash Flow	-183.05M	-198.10M	-179.10M	-56.10M	15.17M

El Al Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1795.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:ELAL, the sentiment is Negative. The current price of 1795 is above the 20-day moving average (MA) of 1675.95, above the 50-day MA of 1685.28, and above the 200-day MA of 1426.48, indicating a neutral trend. The MACD of -48.54 indicates Positive momentum. The RSI at 30.78 is Neutral, neither overbought nor oversold. The STOCH value of 10.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IL:ELAL.

El Al Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELAL	70 Outperform	₪8.43B	5.64	69.39%	―	1.56%	-28.04%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ISRG	60 Neutral	₪389.55M	1.19	―	―	70.95%	-60.44%