€15.16: That's What Analysts Think Air France-KLM SA (EPA:AF) Is Worth After Its Latest Results

Last week, you might have seen that Air France-KLM SA (EPA:AF) released its annual result to the market. The early response was not positive, with shares down 9.6% to €10.23 in the past week. Air France-KLM reported in line with analyst predictions, delivering revenues of €30b and statutory earnings per share of €4.10, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Air France-KLM

After the latest results, the 16 analysts covering Air France-KLM are now predicting revenues of €31.5b in 2024. If met, this would reflect a reasonable 5.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 44% to €4.23. Before this earnings report, the analysts had been forecasting revenues of €31.4b and earnings per share (EPS) of €4.12 in 2024. So the consensus seems to have become somewhat more optimistic on Air France-KLM's earnings potential following these results.

The average the analysts price target fell 6.1% to €15.16, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Air France-KLM, with the most bullish analyst valuing it at €26.00 and the most bearish at €9.20 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Air France-KLM's rate of growth is expected to accelerate meaningfully, with the forecast 5.0% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.7% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Air France-KLM is expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Air France-KLM's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Air France-KLM's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Air France-KLM's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Air France-KLM going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Air France-KLM that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.