Major Estimate Revision • Jul 16
Consensus EPS estimates increase by 17% The consensus outlook for fiscal year 2026 has been updated. 2026 EPS estimate increased from ₩460 to ₩537. Revenue forecast steady at ₩27.7b. Net income forecast to shrink 25% next year vs 20% decline forecast for Airlines industry in South Korea. Consensus price target broadly unchanged at ₩34,083. Share price was steady at ₩26,300 over the past week. Valuation Update With 7 Day Price Move • Jun 15
Investor sentiment improves as stock rises 26% After last week's 26% share price gain to ₩30,000, the stock trades at a forward P/E ratio of 25x. Average forward P/E is 13x in the Airlines industry in Asia. Total returns to shareholders of 35% over the past three years. Major Estimate Revision • May 23
Consensus EPS estimates fall by 12% The consensus outlook for fiscal year 2026 has been updated. 2026 EPS estimate fell from ₩660 to ₩578 per share. Revenue forecast steady at ₩27.4b. Net income forecast to shrink 68% next year vs 21% decline forecast for Airlines industry in South Korea. Consensus price target up from ₩30,846 to ₩31,667. Share price rose 2.9% to ₩26,800 over the past week. Announcement • May 14
Korean Airlines Co.,Ltd. (KOSE:A003490) agreed to acquire remaining 36.12% stake in Asiana Airlines, Inc. (KOSE:A020560) for approximately KRW 510 billion. Korean Airlines Co.,Ltd. (KOSE:A003490) agreed to acquire remaining 36.12% stake in Asiana Airlines, Inc. (KOSE:A020560) for approximately KRW 510 billion on May 13, 2026. The consideration consists of common equity of Korean Airlines Co.,Ltd. at a ratio of 0.273643 per common equity of Asiana Airlines, Inc. Upon completion, Korean Airlines Co.,Ltd. will own 100% stake in Asiana Airlines, Inc.
The merger requires approval from the Minister of Land, Infrastructure, Transport and Tourism under the Airline Business Act. The deal is subject to business combination reporting and approval from Vietnam competition authorities. The transaction is subject to approval of merger agreement by target board, approval of offer by acquirer shareholders, approval of offer by acquirer board and approval of offer by target shareholders. The ESG Committee of Asiana Airlines, acting as special committee for the transaction. The deal has been approved by Asiana Airlines and Korean Airlines board.
The merger agreement is expected to be signed on May 14, 2026. The expected completion of the transaction is December 16, 2026. Major Estimate Revision • Apr 14
Consensus EPS estimates fall by 15%, revenue upgraded The consensus outlook for fiscal year 2026 has been updated. 2026 revenue forecast increased from ₩25.2b to ₩25.7b. EPS estimate fell from ₩2,113 to ₩1,786 per share. Net income forecast to shrink 33% next year vs 17% decline forecast for Airlines industry in South Korea. Consensus price target of ₩30,538 unchanged from last update. Share price rose 6.9% to ₩24,700 over the past week. Board Change • Apr 10
High number of new directors There are 6 new directors who have joined the board in the last 3 years. Independent Chairman Seok-Dong Kim was the last director to join the board, commencing their role in 2026. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Announcement • Apr 04
Tragic In-Flight Death of 33-Year-Old Maryland Woman Spurs Wrongful Death Lawsuit Against Korean Air Burns Charest LLP announced that a wrongful death lawsuit filed in a Virginia federal court on behalf of the estate of Porscha Tynisha Brown, a 33-year-old Maryland resident who died during an international flight operated by Korean Airlines on March 29, 2024. The lawsuit alleges Ms. Brown’s death resulted directly from a series of critical failures by Korean Air flight personnel aboard Flight KE 94 from Washington Dulles International Airport to Seoul, South Korea. According to the complaint, Ms. Brown experienced sudden respiratory distress approximately 12 hours into the flight, telling her traveling companions and airline personnel, “I can’t breathe,” before collapsing. Although flight attendants provided what they claimed to be an oxygen mask, after the flight, eyewitnesses discovered the mask was never connected to an oxygen supply, leaving Ms. Brown without the life-saving oxygen she urgently needed. The lawsuit further alleges airline personnel failed to follow basic emergency protocols, including providing the onboard medical kit to passengers rendering aid and ensuring the aircraft’s Automated External Defibrillator (AED) was properly deployed and operational. Instead, even as the AED indicated that a shock was necessary to revive Ms. Brown, flight personnel stood by and watched when untrained passengers were unable to operate the machine. In addition, the complaint states the flight crew failed to promptly notify the cockpit of the severity of the emergency, delaying a diversion to the nearest airport. The aircraft ultimately made an emergency landing in Osaka, Japan, where Ms. Brown was pronounced dead on arrival. Ms. Brown was a highly accomplished and respected professional, working as a safety specialist for the United States Department of Defense. Just four days before her death, she received an award for excellence from her command at Fort Belvoir. The honor was later renamed in her memory. The lawsuit, brought under the Montreal Convention governing international air travel, seeks damages for wrongful death, including compensation for Ms. Brown’s pain and suffering, lost future earnings and the profound loss suffered by her family, which includes her parents, brother and two young nephews. Last year, Nicholson and Crowe of Burns Charest secured a $9.6 million jury verdict against American Airlines in a California court based on claims that a flight crew failed to follow the airline’s procedures when a passenger suffered a stroke shortly after takeoff, leading to his paralysis. The case is Gormly v. Korean Airlines Co., Case No. 1:26-cv-00845, filed in the U.S. District Court for the Eastern District of Virginia. Reported Earnings • Mar 14
Full year 2025 earnings: EPS and revenues exceed analyst expectations Full year 2025 results: EPS: ₩2,133 (down from ₩3,566 in FY 2024). Revenue: ₩25t (up 41% from FY 2024). Net income: ₩779.7b (down 41% from FY 2024). Profit margin: 3.1% (down from 7.4% in FY 2024). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 1.2%. Earnings per share (EPS) also surpassed analyst estimates by 22%. Revenue is forecast to stay flat during the next 2 years compared to a 3.2% growth forecast for the Airlines industry in South Korea. Over the last 3 years on average, earnings per share has fallen by 15% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Announcement • Feb 26
Korean Airlines Co.,Ltd., Annual General Meeting, Mar 26, 2026 Korean Airlines Co.,Ltd., Annual General Meeting, Mar 26, 2026, at 09:01 Tokyo Standard Time. Location: auditorium, 260, haneul-gil, gangseo-gu, seoul South Korea Valuation Update With 7 Day Price Move • Feb 25
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to ₩28,850, the stock trades at a forward P/E ratio of 12x. Average forward P/E is 10x in the Airlines industry in Asia. Total returns to shareholders of 35% over the past three years. Announcement • Feb 05
Korean Airlines Co.,Ltd. announces Annual dividend Korean Airlines Co.,Ltd. announced Annual dividend of KRW 750.0000 per share, ex-date on March 30, 2026 and record date on March 31, 2026. Major Estimate Revision • Jan 17
Consensus EPS estimates fall by 12% The consensus outlook for fiscal year 2025 has been updated. 2025 EPS estimate fell from ₩2,023 to ₩1,790 per share. Revenue forecast steady at ₩25.0b. Net income forecast to shrink 4.9% next year vs 3.7% growth forecast for Airlines industry in South Korea . Consensus price target broadly unchanged at ₩29,615. Share price rose 10.0% to ₩24,300 over the past week. Price Target Changed • Jan 06
Price target decreased by 7.7% to ₩29,462 Down from ₩31,923, the current price target is an average from 13 analysts. New target price is 31% above last closing price of ₩22,500. Stock is down 3.2% over the past year. The company is forecast to post earnings per share of ₩2,023 for next year compared to ₩3,556 last year. New Risk • Dec 08
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 4.1% Last year net profit margin: 6.1% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (4.1% net profit margin). Reported Earnings • Nov 20
Third quarter 2025 earnings released: ₩318 loss per share (vs ₩791 profit in 3Q 2024) Third quarter 2025 results: ₩318 loss per share (down from ₩791 profit in 3Q 2024). Revenue: ₩6.03t (up 29% from 3Q 2024). Net loss: ₩119.3b (down 141% from profit in 3Q 2024). Revenue is forecast to grow 3.2% p.a. on average during the next 3 years, compared to a 4.4% growth forecast for the Airlines industry in South Korea. Over the last 3 years on average, earnings per share has fallen by 14% per year but the company’s share price has only fallen by 5% per year, which means it has not declined as severely as earnings. Announcement • Oct 23
Korean Airlines Co.,Ltd. (KOSE:A003490) completed the acquisition of 11.32% stake in WestJet Airlines Ltd. from Onex Partners Manager LP. Korean Airlines Co.,Ltd. (KOSE:A003490) agreed to acquire 11.32% stake in WestJet Airlines Ltd. from Onex Partners Manager LP for KRW 270 billion million on May 9, 2025. The transaction is subject to approval by regulatory board / committee. The transaction has been approved by the board of directors of Korean Airlines Co.,Ltd. The transaction is expected to close on July 9, 2025. As of July 8, 2025, the transaction is now expected to close on September 9, 2025. As of September 8, 2025, the transaction is now expected to close on February 3, 2026.
Barclays Capital Canada Inc. acted as financial advisor for WestJet Airlines Ltd. and Onex Partners Manager LP. RBC Capital Markets Inc. acted as financial advisor to Onex Partners Manager LP. Goodmans LLP acted as legal advisor to WestJet Airlines Ltd. and Onex Corporation.
Korean Airlines Co.,Ltd. (KOSE:A003490) completed the acquisition of 11.32% stake in WestJet Airlines Ltd. from Onex Partners Manager LP on October 22, 2025. Major Estimate Revision • Oct 23
Consensus EPS estimates fall by 22% The consensus outlook for earnings per share (EPS) in fiscal year 2025 has deteriorated. 2025 revenue forecast decreased from ₩25.2b to ₩24.9b. EPS estimate also fell from ₩3,760 per share to ₩2,918 per share. Net income forecast to shrink 12% next year vs 0.09% growth forecast for Airlines industry in South Korea . Consensus price target down from ₩31,923 to ₩30,692. Share price was steady at ₩22,450 over the past week. Major Estimate Revision • Oct 01
Consensus EPS estimates fall by 11% The consensus outlook for fiscal year 2025 has been updated. 2025 EPS estimate fell from ₩4,240 to ₩3,793 per share. Revenue forecast steady at ₩25.3b. Net income forecast to grow 1.7% next year vs 1.7% growth forecast for Airlines industry in South Korea. Consensus price target broadly unchanged at ₩31,923. Share price was steady at ₩22,700 over the past week. Price Target Changed • Jun 11
Price target decreased by 7.9% to ₩30,818 Down from ₩33,455, the current price target is an average from 11 analysts. New target price is 35% above last closing price of ₩22,850. Stock is up 2.7% over the past year. The company is forecast to post earnings per share of ₩3,790 for next year compared to ₩3,556 last year. Reported Earnings • May 21
First quarter 2025 earnings released: EPS: ₩775 (vs ₩1,015 in 1Q 2024) First quarter 2025 results: EPS: ₩775 (down from ₩1,015 in 1Q 2024). Revenue: ₩6.49t (up 51% from 1Q 2024). Net income: ₩284.7b (down 24% from 1Q 2024). Profit margin: 4.4% (down from 8.7% in 1Q 2024). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 8.3% p.a. on average during the next 3 years, compared to a 5.5% growth forecast for the Airlines industry in Asia. Over the last 3 years on average, earnings per share has fallen by 11% per year whereas the company’s share price has fallen by 8% per year. Major Estimate Revision • Apr 15
Consensus revenue estimates increase by 16%, EPS downgraded The consensus outlook for fiscal year 2025 has been updated. 2025 revenue forecast increased from ₩22.5b to ₩26.1b. EPS estimate fell from ₩4,486 to ₩4,116. Net income forecast to grow 7.3% next year vs 9.0% growth forecast for Airlines industry in South Korea. Consensus price target down from ₩33,455 to ₩31,636. Share price was steady at ₩20,650 over the past week. Reported Earnings • Mar 15
Full year 2024 earnings: EPS in line with expectations, revenues disappoint Full year 2024 results: EPS: ₩3,566 (up from ₩2,866 in FY 2023). Revenue: ₩18t (up 11% from FY 2023). Net income: ₩1.32t (up 24% from FY 2023). Profit margin: 7.4% (up from 6.6% in FY 2023). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 11%. Earnings per share (EPS) were mostly in line with analyst estimates. Revenue is forecast to grow 11% p.a. on average during the next 3 years, compared to a 6.2% growth forecast for the Airlines industry in Asia. Over the last 3 years on average, earnings per share has fallen by 3% per year but the company’s share price has fallen by 9% per year, which means it is performing significantly worse than earnings. Announcement • Feb 25
Korean Airlines Co.,Ltd., Annual General Meeting, Mar 26, 2025 Korean Airlines Co.,Ltd., Annual General Meeting, Mar 26, 2025, at 09:00 Tokyo Standard Time. Location: auditorium, 260, haneul-gil, gangseo-gu, seoul South Korea Major Estimate Revision • Feb 11
Consensus revenue estimates increase by 10% The consensus outlook for revenues in fiscal year 2025 has improved. 2025 revenue forecast increased from ₩20.5b to ₩22.6b. EPS estimate increased from ₩4,175 to ₩4,373 per share. Net income forecast to grow 42% next year vs 6.9% growth forecast for Airlines industry in South Korea. Consensus price target broadly unchanged at ₩33,182. Share price was steady at ₩23,550 over the past week. Upcoming Dividend • Dec 20
Upcoming dividend of ₩750 per share Eligible shareholders must have bought the stock before 27 December 2024. Payment date: 21 April 2025. Payout ratio is a comfortable 26% and this is well supported by cash flows. Trailing yield: 3.2%. Lower than top quartile of South Korean dividend payers (3.9%). Lower than average of industry peers (3.9%). Declared Dividend • Nov 23
Dividend of ₩750 announced Shareholders will receive a dividend of ₩750. Ex-date: 27th December 2024 Payment date: 21st April 2025 Dividend yield will be 3.1%, which is higher than the industry average of 2.5%. Sustainability & Growth Dividend is well covered by both earnings (26% earnings payout ratio) and cash flows (23% cash payout ratio). The dividend has increased by an average of 25% per year over the past 5 years. However, payments have been volatile during that time. EPS is expected to grow by 23% over the next 2 years, which should provide support to the dividend and adequate earnings cover. Major Estimate Revision • Aug 09
Consensus EPS estimates increase by 13% The consensus outlook for fiscal year 2024 has been updated. 2024 EPS estimate increased from ₩3,239 to ₩3,656. Revenue forecast steady at ₩18.1b. Net income forecast to grow 12% next year vs 7.0% decline forecast for Airlines industry in South Korea. Consensus price target of ₩30,583 unchanged from last update. Share price was steady at ₩20,650 over the past week. Announcement • Jun 06
Korean Air to Launch New Route to Macau Korean Air launched a new daily service between Seoul Incheon and Macau from July 1. Flights depart from Seoul Incheon International Airport at 9:15 pm and arrive at Macau International Airport at 11:55 pm. The return flights depart from Macau International Airport at 1:10 am the next day and arrive at Seoul Incheon International Airport at 6:00 am. The flight time is approximately 3 hours and 40 minutes. The route will be served by the airline's fleet of Airbus A321neos from July 15. The A321neo presents a pleasurable flight experience for short-haul travelers with a sophisticated cabin interior, and advanced personal inflight entertainment systems. The A321neo is also equipped with fully lie-flat seats in Prestige Class. The new Macau service provides Greater Bay Area travelers with more flight options. Travelers from cities such as Jiangmen, Zhongshan, and Taishan can reach the airport in as little as two hours. Travelers from the region will also have the option to connect to Korean Air's extensive North America and Japan destinations via Seoul Incheon International Airport. Korean Air is the only full-service carrier (FSC) connecting Macau and South Korea. Korean Air will continue to expand its route network in China to provide passengers with more convenient travel options and high-quality services. New Risk • May 23
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 1.5% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.5% per year for the foreseeable future. Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Board Change • Apr 01
Insufficient new directors There is 1 new director who has joined the board in the last 3 years. The company's board is composed of: 1 new director. 9 experienced directors. 1 highly experienced director. Chief Safety & Operating Officer and Executive Director Jong-Seok Yoo was the last director to join the board, commencing their role in 2023. The company’s insufficient board refreshment is considered a risk according to the Simply Wall St Risk Model. Reported Earnings • Mar 09
Full year 2023 earnings released: EPS: ₩2,866 (vs ₩4,787 in FY 2022) Full year 2023 results: EPS: ₩2,866 (down from ₩4,787 in FY 2022). Revenue: ₩16t (up 14% from FY 2022). Net income: ₩1.06t (down 39% from FY 2022). Profit margin: 6.6% (down from 12% in FY 2022). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 4.7% p.a. on average during the next 2 years, compared to a 5.7% growth forecast for the Airlines industry in South Korea. Over the last 3 years on average, earnings per share has increased by 77% per year but the company’s share price has fallen by 7% per year, which means it is significantly lagging earnings. Announcement • Feb 15
Korean Air's Asiana Acquisition Receives Conditional EU Approval Korean Air Lines Co., Ltd. (KOSE:A003490, South Korea’s largest carrier, has received conditional approval from the EU to merge with Asiana Airlines, Inc. (KOSE:A020560), another S. Korean company, with the sale of Asiana’s cargo units and route adjustments as key conditions, leaving the United States as the final approver among 14 nations. EU’s approval comes with certain conditions to eliminate monopolies, such as the requirement to sell Asiana Airlines’ cargo units. The approval, though conditional, essentially means that the merger has been granted approval. U.S. is the only country among the 14 nations that still needs to approve the merger. Korean Air has recently announced that it has received conditional approval from the European Commission (EC) for the corporate merger related to the acquisition of Asiana Airlines. However, in order to obtain final approval, Korean Air must sell Asiana Airlines’ cargo units and yield its rights for aircraft takeoffs and landings in four European cities’ routes to its competitors. It has been reported that the EU had the strictest evaluation of the merger by showing concerns over the monopoly issues that this merger could bring. Korean Air had submitted a notification of the proposed merger in Jan. 2023, and the European Commission (EC) was supposed to approve it by July 5 of the same year. However, the EC extended the review period twice, citing concerns about potential monopoly issues, and required Korean Air to take additional measures. Regarding this, Korean Air presented proposals to the European Commission to address concerns over the company’s acquisition of Asiana Airlines. The proposals include the sale of Asiana’s cargo business and the transfer of some European routes to T’way Air, a S. Korean Low-Cost Carrier (LCC). T’way Air is set to launch flights on four overlapping routes, including the Incheon-Paris route, in the second half of this year. It is expected that Jeju Air, another S. Korean LCC with significant financial resources, will purchase Asiana’s cargo business. Korean Air has stated that it plans to expedite discussions with the US side and conclude the merger review process, pending approval from the EU competition authorities. New Risk • Jan 31
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 1.6% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 1.6% per year for the foreseeable future. Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (8.6% net profit margin). Announcement • Jan 12
Korean Air-Asiana Deal Reportedly Set to Win EU Antitrust Nod Korean Air Lines Co., Ltd. (KOSE:A003490) is expected to win EU antitrust approval to buy Asiana Airlines, Inc. (KOSE:A020560) after the companies pledged to sell the latter's cargo unit and divest routes to four European cities, two people with direct knowledge of the matter said. The Korean deal underscores a wave of consolidation in the airline sector, with Lufthansa (LHAG.DE) seeking a 41% stake in Italy's ITA Airways and British Airways and Iberia owner IAG (ICAG.L) aiming to buy the remaining 80% of Spanish carrier Air Europa it does not already own. Korean Air, South Korea's biggest carrier, in late 2020 said it planned to spend KRW 1.8 trillion ($1.37 billion) to become the top shareholder of indebted Asiana. It submitted the remedy offer in November last year, with the proposed cargo business sale a significant departure from the usual airline remedies of airport slots and access to frequent flyer programmes. South Korean budget airline T'way Air (091810.KS) is expected to acquire Asiana's cargo business after EU competition officials made it clear that they would prefer an Asian, preferably a Korean rival, to be the buyer, the people said. Passenger routes to be divested are those to Barcelona, Frankfurt, Paris and Rome, they said. The Commission declined to comment. It has beefed up its approach towards air mergers after previously approved deals led to price hikes despite remedies to address their concessions. Korean Air said that after comprehensive discussions it had submitted remedies that can address the EC's concerns. "We will continue our efforts to secure the approval from the EC and the remaining regulatory bodies," it added. The deal also needs approval from the United States and Japan. The UK competition watchdog cleared the deal last year after the carriers agreed to help Virgin Atlantic Airways (VA.UL) develop air passenger and air cargo services on the London-Seoul route. Upcoming Dividend • Dec 20
Upcoming dividend of ₩750 per share at 3.2% yield Eligible shareholders must have bought the stock before 27 December 2023. Payment date: 22 April 2024. Payout ratio is a comfortable 21% and this is well supported by cash flows. Trailing yield: 3.2%. Lower than top quartile of South Korean dividend payers (3.5%). In line with average of industry peers (3.5%). Major Estimate Revision • Nov 17
Consensus EPS estimates increase by 15% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate increased from ₩3,032 to ₩3,475. Revenue forecast steady at ₩15.9b. Net income forecast to shrink 8.1% next year vs 2.3% growth forecast for Airlines industry in South Korea . Consensus price target broadly unchanged at ₩30,364. Share price rose 5.9% to ₩22,550 over the past week. Announcement • Oct 18
Korean Air Lines Reportedly Offer to Sell Asiana Airlines’ Air Cargo Business, Routes to Satisfy EU Regulators South Korea’s biggest carrier, Korean Air Lines Co., Ltd. (KOSE:A003490) will offer to sell Asiana Airlines, Inc. (KOSE:A020560)’s air cargo business and divest routes to four EU cities in a bid to gain EU antitrust approval for acquiring its rival, two people familiar with the matter said. Korean Air is now in talks with several rivals and will likely clinch a deal with a Korean air cargo competitor to buy the assets, one of the people said on Tuesday. The carrier plans to submit the package together with the remedy taker to the European Commission by the end of October although the timing could still slip, the person said. Price Target Changed • Oct 18
Price target decreased by 8.4% to ₩30,400 Down from ₩33,200, the current price target is an average from 10 analysts. New target price is 51% above last closing price of ₩20,150. Stock is down 13% over the past year. The company is forecast to post earnings per share of ₩3,044 for next year compared to ₩4,772 last year. New Risk • Sep 11
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 11% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 11% per year for the foreseeable future. Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (8.7% net profit margin). New Risk • Aug 22
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 8.7% Last year net profit margin: 13% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 11% per year for the foreseeable future. Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (8.7% net profit margin). Buying Opportunity • Jul 06
Now 21% undervalued Over the last 90 days, the stock is up 12%. The fair value is estimated to be ₩32,119, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 16% over the last 3 years. Meanwhile, the company has become profitable. Revenue is forecast to grow by 8.8% in 2 years. Earnings is forecast to decline by 34% in the next 2 years. Major Estimate Revision • Jun 16
Consensus EPS estimates increase by 41% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate increased from ₩2,898 to ₩4,091. Revenue forecast steady at ₩15.0b. Net income forecast to shrink 3.2% next year vs 24% growth forecast for Airlines industry in South Korea . Consensus price target broadly unchanged at ₩32,375. Share price rose 7.8% to ₩24,250 over the past week. Reported Earnings • May 18
First quarter 2023 earnings released: EPS: ₩631 (vs ₩1,521 in 1Q 2022) First quarter 2023 results: EPS: ₩631 (down from ₩1,521 in 1Q 2022). Revenue: ₩3.59t (up 25% from 1Q 2022). Net income: ₩233.8b (down 56% from 1Q 2022). Profit margin: 6.5% (down from 19% in 1Q 2022). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 3.1% p.a. on average during the next 3 years, compared to a 11% growth forecast for the Airlines industry in Asia. Over the last 3 years on average, earnings per share has increased by 126% per year but the company’s share price has only increased by 4% per year, which means it is significantly lagging earnings growth. Reported Earnings • Nov 17
Third quarter 2022 earnings released: EPS: ₩1,064 (vs ₩293 in 3Q 2021) Third quarter 2022 results: EPS: ₩1,064 (up from ₩293 in 3Q 2021). Revenue: ₩3.91t (up 70% from 3Q 2021). Net income: ₩393.6b (up 271% from 3Q 2021). Profit margin: 10% (up from 4.6% in 3Q 2021). The increase in margin was driven by higher revenue. Revenue is forecast to grow 3.2% p.a. on average during the next 3 years, compared to a 20% growth forecast for the Airlines industry in Asia. Over the last 3 years on average, earnings per share has increased by 114% per year but the company’s share price has only increased by 1% per year, which means it is significantly lagging earnings growth. Board Change • Nov 16
High number of new directors There are 6 new directors who have joined the board in the last 3 years. Independent Director Yong-Sung Jang was the last director to join the board, commencing their role in 2021. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Major Estimate Revision • Nov 09
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 EPS estimate increased from ₩4,132 to ₩4,613. Revenue forecast steady at ₩13.9b. Net income forecast to shrink 5.4% next year vs 9.1% decline forecast for Airlines industry in South Korea. Consensus price target broadly unchanged at ₩35,444. Share price rose 7.9% to ₩24,650 over the past week. Price Target Changed • Oct 18
Price target decreased to ₩36,556 Down from ₩39,333, the current price target is an average from 9 analysts. New target price is 62% above last closing price of ₩22,550. Stock is down 26% over the past year. The company is forecast to post earnings per share of ₩4,349 for next year compared to ₩1,737 last year. Board Change • Apr 27
High number of new directors There are 6 new directors who have joined the board in the last 3 years. Independent Director Yong-Sung Jang was the last director to join the board, commencing their role in 2021. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Breakeven Date Change • Dec 31
Forecast breakeven date pushed back to 2022 The 12 analysts covering Korean Air Lines previously expected the company to break even in 2021. New consensus forecast suggests the company will make a profit of ₩638.3b in 2022. Average annual earnings growth of 19% is required to achieve expected profit on schedule. Reported Earnings • Nov 18
Third quarter 2021 earnings released: EPS ₩293 (vs ₩226 loss in 3Q 2020) The company reported a strong third quarter result with improved earnings, revenues and profit margins. Third quarter 2021 results: Revenue: ₩2.30t (up 44% from 3Q 2020). Net income: ₩106.2b (up ₩135.4b from 3Q 2020). Profit margin: 4.6% (up from net loss in 3Q 2020). Over the last 3 years on average, earnings per share has fallen by 1% per year whereas the company’s share price has fallen by 3% per year. Breakeven Date Change • Aug 18
Forecast breakeven moved forward to 2021 The 12 analysts covering Korean Air Lines previously expected the company to break even in 2022. New consensus forecast suggests the company will make a profit of ₩15.1b in 2021. Earnings growth of 91% is required to achieve expected profit on schedule. Breakeven Date Change • Aug 17
Forecast breakeven moved forward to 2021 The 11 analysts covering Korean Air Lines previously expected the company to break even in 2022. New consensus forecast suggests the company will make a profit of ₩27.6b in 2021. Earnings growth of 82% is required to achieve expected profit on schedule. Major Estimate Revision • Jun 18
Consensus forecasts updated The consensus outlook for 2021 has been updated. 2021 losses forecast to reduce from -₩328 to -₩200 per share. Revenue forecast steady at ₩7.50b. Airlines industry in South Korea expected to see average net income growth of 18% next year. Consensus price target up from ₩32,741 to ₩35,091. Share price fell 2.5% to ₩33,650 over the past week. Price Target Changed • Jun 18
Price target increased to ₩35,636 Up from ₩33,250, the current price target is an average from 12 analysts. New target price is 5.9% above last closing price of ₩33,650. Stock is up 73% over the past year. Major Estimate Revision • Jun 10
Consensus forecasts updated The consensus outlook for 2021 has been updated. 2021 losses forecast to reduce from -₩306 to -₩275 per share. Revenue forecast steady at ₩7.47b. Airlines industry in South Korea expected to see average net income growth of 18% next year. Consensus price target up from ₩32,036 to ₩33,250. Share price rose 2.3% to ₩33,900 over the past week. Reported Earnings • May 20
First quarter 2021 earnings released: ₩248 loss per share (vs ₩6,214 loss in 1Q 2020) The company reported a decent first quarter result with reduced losses and improved control over expenses, although revenues were weaker. First quarter 2021 results: Revenue: ₩1.79t (down 25% from 1Q 2020). Net loss: ₩53.1b (loss narrowed 93% from 1Q 2020). Over the last 3 years on average, earnings per share has fallen by 58% per year but the company’s share price has only fallen by 2% per year, which means it has not declined as severely as earnings. Breakeven Date Change • May 19
Forecast breakeven moved forward to 2021 The 13 analysts covering Korean Air Lines previously expected the company to break even in 2022. New consensus forecast suggests the company will make a profit of ₩9.63b in 2021. Earnings growth of 125% is required to achieve expected profit on schedule. Price Target Changed • Apr 01
Price target increased to ₩29,667 Up from ₩27,192, the current price target is an average from 13 analysts. New target price is 9.1% above last closing price of ₩27,200. Stock is up 43% over the past year. Major Estimate Revision • Jan 28
Analysts update estimates The company's losses in 2020 are expected to improve with analysts raising their consensus EPS forecasts from -₩3,160 to -₩2,641. Revenue estimate was approximately flat at ₩7.68b. The Airlines industry in South Korea is expected to see an average net income growth of 22% next year. The consensus price target increased from ₩27,192 to ₩27,808. Share price is down by 10% to ₩29,650 over the past week. Is New 90 Day High Low • Jan 11
New 90-day high: ₩29,100 The company is up 42% from its price of ₩20,450 on 13 October 2020. The South Korean market is up 29% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Airlines industry, which is up 9.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is ₩28,638 per share. Is New 90 Day High Low • Dec 09
New 90-day high: ₩27,750 The company is up 50% from its price of ₩18,550 on 10 September 2020. The South Korean market is up 13% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Airlines industry, which is up 17% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is ₩24,349 per share. Major Estimate Revision • Dec 08
Analysts update estimates The company's losses in 2020 are expected to improve with analysts raising their consensus EPS forecasts from -₩3,347 to -₩2,883. Revenue estimate was approximately flat at ₩7.67b. The Airlines industry in South Korea is expected to see an average net income growth of 26% next year. The consensus price target increased from ₩24,962 to ₩25,962. Share price is up 1.3% to ₩26,700 over the past week. Is New 90 Day High Low • Nov 09
New 90-day high: ₩21,800 The company is up 15% from its price of ₩18,900 on 11 August 2020. The South Korean market is up 1.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Airlines industry, which is up 1.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is ₩30,185 per share. Is New 90 Day High Low • Oct 23
New 90-day high: ₩21,150 The company is up 15% from its price of ₩18,400 on 24 July 2020. The South Korean market is up 7.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Airlines industry, which is down 1.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is ₩30,593 per share. Is New 90 Day High Low • Oct 06
New 90-day high: ₩19,800 The company is up 18% from its price of ₩16,800 on 08 July 2020. The South Korean market is up 10.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Airlines industry, which is down 7.0% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is ₩29,038 per share. Major Estimate Revision • Oct 01
Analysts update estimates The company's losses in 2020 are expected to improve with analysts raising their consensus EPS forecasts from -₩4,336 to -₩3,857. Revenue estimate was approximately flat at ₩7.97b. The Airlines industry in South Korea is expected to see a 38% decline in net income next year. The consensus price target was lowered from ₩22,115 to ₩21,885. Share price is up 4.7% to ₩18,850 over the past week. 
