Air France-KLM shares advanced 2.6% to €11.93 on Tuesday after Kepler Cheuvreux upgraded the stock to Hold from Reduce, citing improved near-term prospects following the company’s second-quarter results.
The brokerage maintained its price target at €11.50, unchanged from its prior assessment. Air France-KLM’s shares had declined roughly 12% in the prior month, a move analysts attributed to geopolitical risks tied to the Iran crisis. Kepler revised its financial model upward, raising this year’s profit forecast by about 20% while making modest adjustments to medium-term outlooks.
The company reported group revenue of €9.3 billion for the second quarter, an increase of nearly 10% year-over-year. The growth was driven by strong performance in premium and cargo segments, which offset higher fuel costs and surpassed market expectations on both revenue and earnings.
The stock’s rebound follows a period of volatility linked to Middle East tensions. The CAC 40, France’s primary benchmark, traded narrowly and closed lower in the prior session as investors weighed the potential impact of U.S. sanctions on Iran and their implications for global oil prices. U.S. equities advanced modestly, with the S&P 500 up 0.2% and the Nasdaq gaining 0.6%.
European markets are also awaiting signals from the upcoming Jackson Hole symposium and policy guidance from the European Central Bank regarding interest rates.
