Update shared on 24 Nov 2025
Air New Zealand's analyst price target remains steady at $0.66. Analysts cite consistent revenue growth expectations and a slightly lower discount rate as supporting factors for maintaining their valuation outlook.
Analyst Commentary
Analysts provide a nuanced perspective on Air New Zealand's current valuation, outlook, and operational risks. Their insights reflect both optimism regarding the airline's execution and caution around ongoing challenges within the sector.
Bullish Takeaways- Bullish analysts point to consistent revenue growth expectations as a key reason for maintaining a steady price target. This suggests confidence in the airline's commercial recovery.
- Improved underlying operating metrics, particularly in core service offerings, are seen as indicators of effective execution and market resilience.
- Slightly lower discount rates are cited as supporting higher valuations. This underlines a more favorable macroeconomic environment and lower perceived risk.
- Commercial aviation demand is perceived as healthy, which supports continued momentum in top-line growth and forecasts for passenger volume recovery.
- Bearish analysts caution that any downturn in customer satisfaction or persistent operational disruptions could create headwinds for revenue growth and shareholder returns.
- Uncertainty around rising costs and competitive pressures is highlighted as an ongoing threat to margin improvement and profitability.
- Bearish views also encompass concerns about over-reliance on external factors such as global travel demand and regulatory changes, which could impact the sustainability of current valuation levels.
What's in the News
- Air New Zealand forecasts a first-half pre-tax loss for FY2026 in the range of $30 million to $55 million, assuming average jet fuel pricing of USD 85 per barrel. The airline also cautions that traditional first- and second-half comparisons may not reflect full-year trends. (Company guidance)
- The airline reported group operating results for September 2025 showing a year-on-year increase in passengers carried and Revenue Passenger Kilometres. Passenger Load Factor held steady at 84.0%. (Operating results)
- BETA Technologies' ALIA aircraft completed its first take-off in New Zealand in partnership with Air New Zealand. This marks a significant step in the airline’s Next Generation Aircraft programme and demonstrates battery-electric aviation technology under New Zealand conditions. (Company announcement)
- The Board of Directors declared a final unimputed ordinary dividend for the 2025 financial year of 1.25 cents per share, totaling $41 million, payable on September 25, 2025. (Dividend announcement)
- Air New Zealand completed the repurchase of 61,470,872 shares, representing 1.8% of shares outstanding, for NZD 38 million as part of its buyback programme. (Company update)
Valuation Changes
- Fair Value Estimate: Remained unchanged at NZ$0.66 per share.
- Discount Rate: Decreased slightly from 10.94% to 10.77%.
- Revenue Growth Forecast: Remained steady at 4.53% per annum.
- Net Profit Margin: No change, holding at approximately 2.79%.
- Future P/E Ratio: Decreased marginally from 12.38x to 12.32x.
Disclaimer
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