A Look at Air New Zealand (NZSE:AIR) Valuation After 2026 Earnings Outlook and Sector Headwinds

Air New Zealand (NZSE:AIR) has issued a fresh earnings forecast, signaling to investors that profits for the first half of 2026 may land at or below last period’s level. The company cites higher sector charges and soft domestic demand as challenges.

See our latest analysis for Air New Zealand.

While Air New Zealand’s latest guidance has cast a cautious shadow, the stock’s momentum has generally been muted, with a 1-year total shareholder return of just 0.18%. Despite small recent gains in passenger figures, the company’s combination of tepid share price movements and evolving sector headwinds means long-term performance remains subdued, and investors may be weighing up new risks alongside growth hopes.

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With Air New Zealand trading below analyst price targets and forecasting subdued near-term earnings, investors may be questioning whether there is hidden value waiting to be unlocked or if markets are already preparing for a tougher stretch ahead.

Most Popular Narrative: 12.8% Undervalued

With a fair value of NZ$0.688 and shares last closing at NZ$0.6, the most popular narrative sees room for upside if the company's growth and margin assumptions are realised. The difference suggests analysts currently view Air New Zealand as attractively valued, provided upcoming catalysts deliver as forecast.

As fleet modernization accelerates from FY '27 onward with the return of retrofitted aircraft and new fuel-efficient 787s, Air New Zealand is positioned to unlock operating scale, reduce unit costs, and recover suppressed capacity. This sets the stage for higher revenue and improved net margins.

Read the complete narrative.

Want to discover what powers this optimistic outlook? The narrative's fair value is pinned on bold improvements in cost efficiency, new aircraft advantages, and a projected margin leap. Which future assumptions make Air New Zealand stand out to analysts, even with sector headwinds and capital challenges? You’ll find the numbers behind this valuation only by reading the narrative in full.

Result: Fair Value of $0.688 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent engine shortages or ongoing cost inflation could quickly erode recent gains. These factors could act as catalysts that might undermine the bullish scenario.

Find out about the key risks to this Air New Zealand narrative.

Build Your Own Air New Zealand Narrative

If you have a different perspective or want to dive into the details on your own, you can easily craft your own view from scratch in just a few minutes, and Do it your way.

A great starting point for your Air New Zealand research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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