Air France-KLM: Morgan Stanley downgrades buy rating
(CercleFinance.com) - In a note published this morning - even though the arrival the Dutch State in shareholder talks is not mentioned - Morgan Stanley has downgraded its buy ("overweight") rating on the Air France-KLM share, adopting a more neutral stance "weigh in line".
However, the broker has adjusted its target price for the share from 12 euros to 12.85 euros.
The research note justifies its change of stance by the share's strong performance since the end of 2018 (+30%). "Shares now reflect settled labour relations and improved strategic clarity of the group," the report says.
In particular, Morgan Stanley believes that Air France's explicit target of improving operating profitability to peer levels is encouraging. Even though it's all very well saying this and that we now need to see action.
In addition, the Dutch state unexpectedly announced that it has taken a 12.7% stake in Air France-KLM's capital and intends to achieve a have a stake similar to that of the French State (14.3%) in order to assert Dutch interests in the group. Note that the share is diving 12% in late morning trading, currently trading at around 11 euros.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
However, the broker has adjusted its target price for the share from 12 euros to 12.85 euros.
The research note justifies its change of stance by the share's strong performance since the end of 2018 (+30%). "Shares now reflect settled labour relations and improved strategic clarity of the group," the report says.
In particular, Morgan Stanley believes that Air France's explicit target of improving operating profitability to peer levels is encouraging. Even though it's all very well saying this and that we now need to see action.
In addition, the Dutch state unexpectedly announced that it has taken a 12.7% stake in Air France-KLM's capital and intends to achieve a have a stake similar to that of the French State (14.3%) in order to assert Dutch interests in the group. Note that the share is diving 12% in late morning trading, currently trading at around 11 euros.
Copyright (c) 2019 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.