(Bloomberg) -- Air France-KLM’s outlook for next year is brightening, according to analysts, who are starting to warm to the stock after a tough year.
The carrier group received a double-upgrade to overweight at JPMorgan on Wednesday. Analyst Harry Gowers points to resilient underlying pricing and a historically low share price, and says an earnings inflection is a possibility heading into winter. Shares climbed as much as 8.4%, the biggest jump in nine months.
Beset by problems all year, Air France-KLM implemented a cost-cutting drive in the spring as geopolitical conflicts and higher costs drove a first-quarter loss. The airline trimmed its capacity outlook for the full year after a deeper-than-expected shortfall from tourists avoiding Paris during this summer’s Olympic Games, driving the stock to a record low. Shares have fallen 34% since the start of the year.
BNP Paribas Exane also upgraded the stock to neutral last week, with analysts noting that this year’s setbacks are unlikely to be repeated in 2025.
Shares in Europe’s airlines have outperformed over the last month as concerns over softer demand have started to ease. Ryanair Holdings CEO Michael O’Leary said last week that his leading budget airline has seen better bookings momentum since August, which served to buoy the sector. Still, a UBS basket of the region’s airlines has slipped 7.1% year-to-date.
--With assistance from Henry Ren and Joe Easton.
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