Air France-KLM: RBC Capital Markets cuts target price.
(CercleFinance.com) - RBC has cut its price target on Air France-KLM from 20 euros to 16 euros, as it considers that the share has "few fundamental attractions.
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After the airlines group proposed to dilute existing investors with a 20% new equity issue (reserved for Delta and China Eastern), the brokerage firm says the promise of eventual synergies are "too small" and far away (2025) to be credible or priced-in.
"We now cannot exclude risk that Air France-KLM might view existing minority shareholders as "sub-ordinated" participants to its industrial partners and other stakeholders," RBC adds.
However, the broker maintains its "outperform" rating on the stock, reflecting expected upside in its 12-month earnings momentum.
Copyright (c) 2017 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.
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After the airlines group proposed to dilute existing investors with a 20% new equity issue (reserved for Delta and China Eastern), the brokerage firm says the promise of eventual synergies are "too small" and far away (2025) to be credible or priced-in.
"We now cannot exclude risk that Air France-KLM might view existing minority shareholders as "sub-ordinated" participants to its industrial partners and other stakeholders," RBC adds.
However, the broker maintains its "outperform" rating on the stock, reflecting expected upside in its 12-month earnings momentum.
Copyright (c) 2017 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.