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JAPSY - Japan Airlines Stock Remains Extremely Undervalued
Japan Airlines Co Ltd JAL ADR
2025-02-06 16:21:54 ET
Summary
Japan Airlines reported a 10.9% revenue increase for the nine months ending December 2024, driven by strong growth in cargo and international passenger revenues.
Despite revenue growth, total expenses rose by 11%, with fuel and non-fuel costs increasing, resulting in only 10% of revenue translating to the bottom line.
The stock trades at 4x EV/EBITDA, below its median of 5.4x, suggesting it's undervalued; I maintain my buy rating.
My FY25 price target is $11.58, offering a 45% upside, supported by an 11% CAGR on EBITDA despite a projected decline in free cash flow.