ANA Holdings (TSE:9202) Valuation Explored Following Major 14% Share Buyback Announcement

ANA Holdings (TSE:9202) just unveiled a sizeable share buyback, planning to repurchase up to 14% of its issued share capital by December 2026. This move often catches investors’ attention, given its focus on capital structure and shareholder value.

See our latest analysis for ANA Holdings.

ANA Holdings’ buyback announcement arrives as the stock shows signs of steadying after a choppy stretch. While the 1-year total shareholder return stands at 4.6%, recent share price momentum has been modest. This suggests the market is weighing renewed management confidence against mixed short-term results.

If ANA’s capital shift has you rethinking your portfolio, now is a smart moment to broaden your search and discover fast growing stocks with high insider ownership

The key question now is whether ANA Holdings’ renewed capital commitment signals real value that the market has yet to recognize, or if future growth is already fully reflected in the current share price.

Price-to-Earnings of 9.2: Is it justified?

ANA Holdings currently trades at a price-to-earnings ratio of 9.2, which places it above close peers and below the broader market average. This measure suggests the market may be attributing a premium to the company’s earnings, but not to an excessive degree.

The price-to-earnings (P/E) ratio is a key metric for airlines, connecting a company's share price with its reported profitability. It helps investors gauge how much they are paying for each unit of earnings and can reveal whether expectations are running high or low.

While ANA’s P/E ratio is slightly above the average of its peer group (peers average 8.7x), it remains below the Japanese market average of 13.7x. This implies a more moderate outlook from investors. Compared to the Asian Airlines industry, ANA also looks attractive, with its 9.2x multiple lower than the industry average of 10.2x. Meanwhile, the estimated Fair Price-to-Earnings Ratio is 15.4x, pointing to a level that the market could conceivably shift toward if sentiment or fundamentals improve.

Explore the SWS fair ratio for ANA Holdings

Result: Price-to-Earnings of 9.2 (ABOUT RIGHT)

However, muted net income growth and recent share price dips signal that ongoing operational challenges could weigh on returns in the near term.

Find out about the key risks to this ANA Holdings narrative.

Another View: DCF Tells a Different Story

While the price-to-earnings ratio suggests ANA Holdings is reasonably priced, our DCF model presents a less optimistic perspective. According to this approach, shares recently traded above an estimated fair value, which may indicate that market optimism about future cash flows is somewhat high. Is the market overestimating ANA’s long-term potential, or is there more growth than the numbers suggest?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out ANA Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 895 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own ANA Holdings Narrative

If you think the story might go deeper than this, or would rather draw your own conclusions, you can easily build your perspective in just a few minutes with Do it your way.

A great starting point for your ANA Holdings research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Standout Investment Ideas?

Don't limit your search to just one stock. Tap into opportunities others might miss by using the powerful Simply Wall Street Screener to uncover new winners.

• Snap up income potential by scanning for these 15 dividend stocks with yields > 3% with yields above 3%, letting your investments work harder for you from day one.
• Stay ahead of tech trends by targeting these 27 AI penny stocks that are shaping tomorrow’s artificial intelligence breakthroughs and industry shifts.
• Capture untapped value by tracking these 895 undervalued stocks based on cash flows identified by strong cash flows and overlooked fundamentals.

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.

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