Analyst Estimates: Here's What Brokers Think Of Air France-KLM SA (EPA:AF) After Its First-Quarter Report

It's been a good week for Air France-KLM SA (EPA:AF) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.1% to €9.99. It was an okay result overall, with revenues coming in at €6.7b, roughly what the analysts had been expecting. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Air France-KLM

Taking into account the latest results, the current consensus from Air France-KLM's 15 analysts is for revenues of €31.5b in 2024. This would reflect a reasonable 4.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 51% to €3.42. In the lead-up to this report, the analysts had been modelling revenues of €31.5b and earnings per share (EPS) of €3.46 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of €14.36, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Air France-KLM analyst has a price target of €27.50 per share, while the most pessimistic values it at €9.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Air France-KLM'shistorical trends, as the 5.3% annualised revenue growth to the end of 2024 is roughly in line with the 5.5% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.8% per year. So although Air France-KLM is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Air France-KLM analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Air France-KLM has 4 warning signs (and 1 which shouldn't be ignored) we think you should know about.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.