French stock report - Air France - KLM

FRA

Air France - KLM underperforms 98% of the market June 20, 2018 17:30 CEST

NEWS BITES - EUROPE

Air France - KLM (FR:AF), France's 3rd largest Travel & leisure company by market cap, has decreased 8.0c (1.1%) from its last trading session of June 19 to close at EUR7.50. Compared with the CAC 40 Index which fell 18.3 points (0.3%) in the day, the relative price change was -0.7%. The fall was exacerbated by firm volume of 1.2 times the average daily volume of 5.1 million shares. In the French market of 585 stocks traded today, Air France - KLM's stock has a 6-month relative price strength of 2 indicating it is trailing 98% of the market. A price fall combined with a low relative strength is a bearish signal.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

SECTION 2 BULLISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 GLOBAL RANKING

SECTION 6 SUMMARY FINANCIALS

SECTION 7 PROFILE

SECTION 1 AIR FRANCE - KLM BEARISH SIGNALS

1.1 Fundamentals:

+ Net profit margin has averaged 0.5% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

+ Revenue growth and Net Profit margin have shown signs of deterioration in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Dec 17-13.8--15.8
Sep 179.550.47.5

1.2 Technicals:

+ In the last three months the stock has hit a new 52-week low four times, pointing to a downtrend.

+ The present value of EUR1,000 (PV1000) invested one year ago in Air France - KLM is EUR687, for a capital loss of EUR313.

PV10001-week1-month1-year
AF.FR1,0551,045687
CAC 40 Index9859881,015

1.3 Low Performance Indicators:

DescriptionAF ValueRank In Market
Total Debt to Equity2.5In Bottom 5%
Price/MAP2000.69In Bottom 5%
Volatility %4.7In Bottom Quartile
Price Change %-1.1In Bottom Quartile

SECTION 2 AIR FRANCE - KLM BULLISH SIGNALS

2.1 Fundamentals:

+ The P/E of 2.5 multiplied by the P/NTA of 1.9 is 4.8. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.1. Compared with the rest of the market the stock is undervalued and ranks in the top 2% of stock by value of Q Ratio.

+ Air France - KLM is cash rich with Cash to Market Capitalisation at 13.1%.

+ As per the Du Pont analysis, Return on Equity is high at 33.4%. This is computed as net profit margin of -1.1% times asset turnover [sales/assets] of 1.1 times leverage factor [total assets/shareholders' equity] of 8.1.

+ Revenue growth rate has shown signs of recovery in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS GrowthEBITDA Growth
Dec 173.884.1-
Dec 16-4.71,316.133.4

2.2 Undervaluation [compared with sector average]:

+ Price/Sales of 0.1 [0.6]. We estimate Air France - KLM stock is trading at a current year Price/Sales of 0.1 and a forward year Price/Sales of 0.1.

+ Return on Equity 33.4% [5.8%].

2.3 High Performance Indicators:

DescriptionAF ValueRank In Market
Price to Sales0.1In Top 1%
Today's TurnoverEUR47.1 million (US$54.5 million)In Top 5%
P/E * P/NTA4.83In Top 10%
EPS Growth %84.1In Top Quartile
Cash to MCap %13.1In Top Quartile

SECTION 3 AIR FRANCE - KLM PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Air France - KLM is at a discount of 48.8% to its 12-month high of EUR14.65 on November 03, 2017. It is also at a premium of 12.8% to the 12-month low of EUR6.65 on June 11.

+ The present value of EUR1,000 (PV1000) invested five years ago in Air France - KLM is EUR1,046, for a capital gain of EUR46.

+ 5 years Multiplier in EUR = 1.046x

+ Compound Annual Growth Rate (CAGR) in EUR = 0.9%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Air France - KLM is $US905, for a capital loss of $US95.

+ 5 years ago EUR 1 equalled USD 1.3383

+ 5 years Multiplier in USD = 0.905x

+ Compound Annual Growth Rate (CAGR) in USD = -2.0%

Jun 20, 2018: EUR 1 equals USD 1.16

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 2 out of 5 years.

AFClose (EUR)Annual Return %
Jun 207.5(31.3)
1 Yr ago10.9175.4
2 Yrs ago6.22(0.2)
3 Yrs ago6.23(36.4)
4 Yrs ago9.7936.7

Close 5 years ago EUR7.17

3.3 Beta:

+ Beta: the Beta of Air France - KLM stock is 0.7. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ Paris: AF.FR 6,280,000 [VI of 1.3] volume 99.68% of aggregate. Price: EUR7.50.

+ Frankfurt: AFR.FRA 20,150 [VI of 1.8] volume 0.32% of aggregate. Price: EUR7.54.

+ Aggregate volume: there were 6.3 million shares of Air France - KLM worth EUR47.3 million traded today. The aggregate volume was 1.3 times average trading of 4.9 million shares.

3.5 Year-To-Date

+ Air France - KLM (FR:AF), sunk EUR6.10 (or 44.9%) year-to-date (YTD) in 2018 to close at EUR7.50 today. Compared with the CAC 40 Index which has risen 1.1% YTD, this is a relative price change of -46%.

SECTION 4 AIR FRANCE - KLM RELATED NEWS

Other News

+ BSS/News Bites:

Air France - KLM is placed 464/554 in BSS News Bites' ranking of French performers in the past year, a percentile ranking of 17.

+ Vanguard Total World Stock ETF 7581:

The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 9,582 shares in the period Jan 31, 2018 to Apr 30, 2018 worth $US81,544 at an estimated Volume Weighted Average Price (VWAP) of $US8.5101. As at Apr 30, 2018, the Vanguard Total World Stock ETF held 68,516 shares worth $US707,215 by value of the ETF's portfolio [Ranked 2818 out of 7581 by value and 85 out of 134 for France].

SECTION 5 AIR FRANCE - KLM GLOBAL RANKING

Global Rank [out of 47,592 stocks] and Rank in the Europe Region [out of 8,534 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)3.7B3,368732
Total Assets (US$)28.4B1,378304
Revenue (US$)30B461126
Net Profit (US$)(318.6M)42,3467,025
Return on Equity %33.41,476334
Net Profit Margin %(1.1)29,2854,760
Price to Book1.920,7433,063
Price/Earnings2.5612153
PV$1000 (1Year) US$*71132,1185,396
US$* Change (1Year) %-28.932,0095,475

* 1 year ago EUR 1 = USD 1.12

Jun 20, 2018: EUR 1 equals USD 1.16

SECTION 6 AIR FRANCE - KLM SUMMARY FINANCIALS

Financials Summary

Year endedDec 2017Dec 2016Dec 2015
Sales (USD B)29.828.730.1
Pretax (USD M)(598.1)952231.4
Net (USD M)(317)916.2136.5
EPS (EUR)31.62910.115

+ Net profit slumped from US$916.2 million in 2016 to a loss of US$317 million in 2017.

+ Earnings Per Share (EPS) was up 84.1% from EUR1.63 to EUR3.0.

SECTION 7 AIR FRANCE - KLM PROFILE

7.1 Activities

Air France-KLM is one of the world's leading airline companies. Net sales break down by activity as follows: - passenger transportation (77.5%): 71.4 million people transported in 2009/10; - freight transportation (11.6%; No. 2 worldwide): 1.5 Mt of merchandise transported; - maintenance services (4.6%); - other (6.3%): primarily catering service activities (Servair and KLM Catering Services) and charters (Transavia.com). At the end of March 2010, the group had a fleet of 625 airplanes divided between the domestic fleets of Air France (262, of which 148 owned and 114 leased) and KLM (113, of which 33 owned and 80 leased), and the regional fleets of KLM Cityhopper (48, of which 32 owned and 16 leased), Brit Air (43, of which 16 owned and 27 leased), City Jet (27, of which 16 owned and 11 leased), Regional (64, of which 23 owned and 41 leased), VLM Airlines (17, of which 15 owned and 2 leased) and other (51, of which 8 owned and 43 leased).

7.2 Top Management

The chief executive officer and chairman is Jean-Marc Janaillac and the chief financial officer is Frederic Gagey.

7.3 Issued Capital

Based on 428,630,000 issued shares the market capitalisation is EUR3.2 billion (US$3.7 billion).

COMPANY IDENTIFIERS

Contact: +33 (0)1 41 56 88 85

Physical Address: 45 rue de Paris POBox 90112 95747 Roissy Charles de Gaulle France

State/Province/Country: France

Country of Incorporation: France

Exchange: Euronext - Paris

Economic Sector: Consumer Cyclicals

Business Sector: Cyclical Consumer Services

Industry Group: Hotels & Entertainment Services

Industry: Leisure & Recreation

ISIN: FR0000031122

FR:AF; EPA:AF; PA:AF; FP:AF; AIRF.PA

PermID: 4295866970

RIC: AIRF.PA

Air France Klm Sa, Air France-Klm, Astoria Financial Corp

Source: www.BuySellSignals.com