(Adds analyst comment in fourth paragraph.)
Nov. 24 (Bloomberg) -- Air France-KLM Group rose the most in more than a decade after Societe Generale SA raised its rating to “hold” from “sell” and said the stock’s recent decline is overdone.
Europe’s biggest airline rose as much as 15 percent, the biggest intraday advance since Sept. 24, 2001, and traded 8 percent higher at 3:15 p.m. Paris time. The gain trimmed the stock’s drop this year to 72 percent, giving the company a market value of 1.1 billion euros ($1.5 billion).
Deutsche Lufthansa AG and International Consolidated Airlines Group SA, the owner of British Airways and Iberia, also advanced. Airline stocks have tumbled this year amid concern that the combination of higher oil prices and waning demand for air travel will hurt earnings.
“There is still going to be a lot of volatility in the coming weeks and months, but we are at a point where stocks appear to be cheap and people will have a look,” Jonathan Wober, an airline analyst at Societe Generale in London, said in a telephone interview.
Societe Generale also lifted its rating on IAG to “hold” from “sell,” using the same reasoning as for Air France. It left Lufthansa’s rating at “hold.”
IAG gained as much as 5.3 percent in London, and was trading up at 3.7 percent as of 2:20 p.m. local time. Lufthansa rose 3.3 percent in Frankfurt.
Lufthansa will halt all “non-essential investments” for the coming six months, Claudia Lange, a Frankfurt-based spokeswoman for the company, said today. The carrier said Oct. 27 that third-quarter earnings slumped 27 percent to 575 million euros as slowing economic growth hurt bookings.
--Editors: Marthe Fourcade, Thomas Mulier.
To contact the reporter on this story: Steve Rothwell in London at email@example.com
To contact the editor responsible for this story: Chad Thomas at firstname.lastname@example.org