Earnings Miss: Air France-KLM SA Missed EPS By 53% And Analysts Are Revising Their Forecasts

The investors in Air France-KLM SA's (EPA:AF) will be rubbing their hands together with glee today, after the share price leapt 31% to €11.56 in the week following its full-year results. It looks like a pretty bad result, all things considered. Although revenues of €31b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 53% to hit €0.93 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Air France-KLM

After the latest results, the 16 analysts covering Air France-KLM are now predicting revenues of €32.9b in 2025. If met, this would reflect a credible 4.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 300% to €3.71. Yet prior to the latest earnings, the analysts had been anticipated revenues of €32.7b and earnings per share (EPS) of €3.59 in 2025. So the consensus seems to have become somewhat more optimistic on Air France-KLM's earnings potential following these results.

There's been no major changes to the consensus price target of €9.06, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Air France-KLM at €12.05 per share, while the most bearish prices it at €7.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Air France-KLM's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.6% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this to the 12 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.0% per year. Factoring in the forecast slowdown in growth, it looks like Air France-KLM is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Air France-KLM following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at €9.06, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Air France-KLM going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Air France-KLM (1 is a bit unpleasant!) that you should be aware of.

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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.