Japan Airlines Stock Has Room To Fly Higher

2025-05-11 12:02:37 ET

Summary

• Japan Airlines reported strong earnings driven by lower fuel costs, international and cargo revenue growth, and improved load factors, despite rising operating expenses.
• Full-year sales increased by 11.6%, with significant growth in international and cargo revenues, while domestic revenues saw modest growth.
• The stock has a 27% upside potential based on FY25 earnings, supported by stronger-than-expected EBITDA and free cash flow projections for FY26 and FY27.
• The investment case remains compelling due to prudent revenue management, lower valuation multiples compared to peers, and ongoing capacity expansion.

Japan Airlines ( JAPSY ) reported fourth quarter results on the 5 ^th of May. While revenues missed estimates, the stock is up 24% from its lows earlier this year. In February, I covered Japan Airlines with a buy rating and the stock price has increased 12% since, while the S&P 500 lost 7%. It shows that while airline stocks are difficult to invest in and provide value for longer-term investment, the possibility to book profits is definitely there....

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