Air France-KLM Shares Soar 3% and Lead the SBF 120
The stock of the Franco-Dutch airline picks up speed in mid-morning trading, securing the pole position in the broad index. The stock extends a spectacular rally that began in late April, as two brokerage houses have just adjusted their targets on the stock.
The Stock Widens the Gap with Its Moving Averages and Dominates the Broad Index
Air France-KLM shares are up 3.07% at €12.91, leading the SBF 120 while the index remains stagnant. The stock has seen a nearly 26% increase over the past month and nearly 40% over three months, a dynamic few Parisian stocks currently display. This movement further distances the price from its moving averages: the 20-day moving average (€11.72) is now over 10% behind, and the 50-day moving average (€10.64) more than 21% behind. The stock is approaching the resistance identified at €13.14, the last barrier before long-unexplored zones. The RSI at 68 indicates the tension built up by this bullish series, without yet tipping into marked overbought territory. The rise occurs in an otherwise listless Parisian market, with the CAC 40 up only 0.08% and the SBF 120 unchanged. Meanwhile, the VIX rebounds by more than 11%, indicating that American traders remain nervous as Wall Street's opening approaches.
UBS and Deutsche Bank Raise Their Targets After the Rally
On June 22, UBS set its price target at €13.50, indicating limited residual potential from the current price. Deutsche Bank raised its target from €9 to €11 while upgrading its rating to 'hold', a target now more than 14% below today's price. This significant discrepancy between the two houses illustrates the difficulty in valuing the stock after such a surge. According to the consensus of analysts surveyed, the stock is trading at about 3.9 times the earnings expected for the current fiscal year and 2.6 times those of the next fiscal year, a multiple that remains contained despite the price spike. As a reminder, on June 18, the group secured a one billion euro credit line from twelve international banks, intended to refinance existing instruments. The next technical step hinges on breaking through the €13.14 resistance, which would validate the continuation of the momentum.
