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    Air France-KLM (ENXTPA:AF) Beat Expectations, Is The Stock Still Cheap?

    Simply Wall St·11/08/2026 07:17:30
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    Air France-KLM (ENXTPA:AF) drew fresh attention this week after reporting stronger than expected third quarter operating results, receiving support in an EU court ruling on KLM state aid, and gaining a rating upgrade from Barclays.

    For investors tracking the bigger picture, Air France-KLM's recent 1-day share price return of 7.1% and 7-day share price return of 30.4% push the year-to-date share price return to 10.2%, while the 1-year total shareholder return of 40.6% signals momentum that contrasts with a weaker 5-year total shareholder return, hinting that the latest earnings beat, EU court backing and Barclays upgrade are being read as a shift in both growth prospects and perceived risk.

    Ride this renewed interest in Air France-KLM to refresh your watchlist with 222 high quality undervalued stocks that also pair resilient balance sheets with investor momentum.

    After a 30% jump in a week and a 40.6% 1-year total return, Air France-KLM now sits at a clear crossroads. Is the real upside still ahead, or has the share price already banked most of the good news?

    Price-to-Earnings of 2.7x: Is it justified?

    On a simple earnings yardstick, Air France-KLM looks heavily out of step with its recent share price surge. The stock closed at €13.53, yet it trades on a P/E of just 2.7x while peers and the wider Airlines space sit much higher.

    The P/E ratio compares what investors pay for each euro of earnings. For an airline group with €1,310.0m in net income, a 2.7x multiple means the market is attributing a relatively low valuation to those profits, even after the strong 1-year total shareholder return of 40.6%.

    Relative to the Global Airlines industry average P/E of 10.5x and a peer average of 19.5x, the gap is wide and hard to ignore. The estimated fair P/E of 12x is also far above the current 2.7x. This points to a level the valuation could move toward if sentiment and fundamentals stay aligned.

    Explore the SWS fair ratio for Air France-KLM.

    Result: Price-to-Earnings of 2.7x (UNDERVALUED)

    Still, the Air France-KLM story can change fast if earnings momentum cools or if fresh regulatory or state aid decisions shift investor confidence again.

    Find out about the key risks to this Air France-KLM narrative.

    Another View on Air France-KLM: Cash Flows Paint an Even Cheaper Picture

    The low 2.7x P/E already makes Air France-KLM look discounted, yet our DCF model goes further. On that measure, a share price of €13.53 compares with an estimated future cash flow value of €186.84, implying the stock trades very far below that cash flow based estimate.

    Such a wide gap can signal opportunity if cash generation holds up, or it can highlight how fragile confidence still is around leverage and cyclicality. Which story do you think the market is really pricing in?

    Look into how the SWS DCF model arrives at its fair value.

    AF Discounted Cash Flow as at Nov 2026
    AF Discounted Cash Flow as at Nov 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Air France-KLM for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 222 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    Both the excitement around Air France-KLM and the caution in these numbers are clear, so move quickly, pull up the full data set and weigh the 4 key rewards and 1 important warning sign

    Looking for more Air France-KLM style investment ideas?

    If Air France-KLM has sharpened your focus, do not stop here. Broaden your watchlist with other opportunities before the most interesting setups move away from reach.