Air France-KLM: Deutsche Bank upgrades 'sell' rating

(CercleFinance.com) - Believing that despite Lufthansa's warning, there will not be an armageddon scenario, Deutsche Bank has upgraded its previous "sell" rating on the Air France-KLM share to "neutral".

However, the broker has trimmed its corresponding target price from 8 euros to 7.6 euros.

According to analysts, the warning issued by Air France-KLM's German competitor is primarily due to overcapacity and stiff competition in Germany and Austria, not to mention that Lufthansa management's forecasts were judged as being over-optimistic.

The consequences for other airlines - and in particular Air France-KLM - therefore seem limited, even though Deutsche Bank is slightly reducing its forecasts due to recent changes in traffic. The note also points out that Air France-KLM is the largest beneficiary of the recent drop in the price of kerosene.


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