London (Thomson Financial) - UBS has cut its stance on Air France-KLM to 'neutral' from 'buy' and lowered its target price for the stock to 19 eur from 30 eur.
In a note to clients, the broker said the potential acquisition of Alitalia could lead to some volatility in the share in the short term but is still strategically sound further out. It noted that while Alitalia remains unprofitable, significant synergies could be realised through improved load factors, and reduced selling and maintenance costs. The broker said it believes acquiring Alitalia is a sensible strategy in the longer term, as it gives the group access to the affluent northern Italian market.
The broker also said it expects a binding bid around mid-March.