Air France-KLM SA shares advanced 2.6% to €11.93 on Tuesday, as Kepler Cheuvreux upgraded its rating from reduce to hold, citing fair valuation following a sharp monthly decline tied to Middle East geopolitical tensions.
The brokerage also raised its current-year profit forecast for the airline group by approximately 20%, citing stronger-than-expected performance in premium and cargo segments that helped offset rising fuel costs. The upgrade follows a roughly 12% drop in the stock over the prior month, which Kepler Cheuvreux attributed to investor concerns over regional instability.
Group revenue for the second quarter increased nearly 10% year-over-year to €9.3 billion, beating consensus estimates. The company’s Q2 results were released at the end of July, with analysts highlighting robust demand in higher-margin segments as a key driver.
Kepler Cheuvreux’s analysts stated that, in the absence of a significant escalation in the Iran crisis, the current share price reflects the company’s business prospects. The brokerage maintained its price target at €11.50, unchanged from its previous valuation.
European markets remained cautious amid broader macroeconomic uncertainty, with the CAC 40 trading in a narrow range. Investors are monitoring potential U.S. sanctions on Iran and their potential impact on global oil prices, as well as signals from the European Central Bank regarding interest rate policy ahead of the Jackson Hole symposium.
