Last Update 06 Nov 25

NAS: Short Haul And Leisure Focus Will Drive Performance Into September Results

Narrative Update on Norwegian Air Shuttle

The analyst price target for Norwegian Air Shuttle has increased from NOK 17.00 to NOK 17.75. This change reflects analysts' preference for short haul and leisure segment performance among European airlines ahead of the September quarter results.

Analyst Commentary

Analysts have recently adjusted their views on Norwegian Air Shuttle, reflecting both positive and cautious perspectives ahead of the upcoming results season.

Bullish Takeaways

Bullish analysts see strong relative performance in the short haul and leisure travel segments. These are expected to drive revenue growth and support a higher valuation.
The upward revision in the price target signals confidence in Norwegian Air Shuttle's ability to execute on its core routes and capitalize on current travel demand trends.
Improved load factors and cost control measures have contributed to renewed optimism regarding the company's profitability potential in the near term.
Anticipation of resilient passenger demand, especially in leisure travel, supports the positive outlook for sustained earnings momentum.

Bearish Takeaways

Bearish analysts caution that an overreliance on short haul and leisure traffic may expose Norwegian Air Shuttle to demand swings during off-peak seasons, which could affect revenue consistency.
Competition remains intense across European routes and this may put pressure on pricing power and market share growth.
There are concerns about the macroeconomic environment, including potential headwinds from fluctuating fuel costs and currency volatility, which could hinder profitability improvements.
The firm's limited exposure to long haul markets may restrict opportunities for broader network expansion and revenue diversification.

What's in the News

Norwegian Air Shuttle is holding a Special/Extraordinary Shareholders Meeting on November 20, 2025, at 14:00 W. Europe Standard Time (Key Developments).
The company reported operating results for September 2025, with passenger numbers rising to 2,302,536 for the month and 23,126,481 for the rolling twelve months. Both figures are higher than the prior year. The load factor also increased to 86.6% for the month and 85.4% for the twelve months (Key Developments).
Norwegian has expanded its existing Boeing order by exercising the option for 30 additional Boeing 737 MAX 8 aircraft, which brings its total order to 80. The adjusted delivery timeline extends to 2031 and supports Norwegian's ongoing fleet renewal and growth strategy (Key Developments).

Valuation Changes

The discount rate has fallen slightly from 10.06% to 9.83%, reflecting a more favorable risk assessment.
Revenue growth expectations have decreased from 6.17% to 5.77%, indicating more moderate top-line projections.
The net profit margin has risen moderately from 5.42% to 5.82%, suggesting improved profitability assumptions.
The future P/E ratio has declined from 12.91x to 12.08x, implying a lower multiple for forecasted earnings.
The fair value estimate remains unchanged at NOK 18.17 per share.

Robust demand from growth in passenger numbers and new corporate travel agreements suggests potential future revenue growth for Norwegian Air Shuttle.
Operational synergies from acquisitions and new platforms, along with cost-reduction programs, could enhance efficiency and profitability.
Operational and financial uncertainties from legal issues, foreign exchange risks, and competition could hinder growth and affect Norwegian Air Shuttle's future revenue and margins.

Catalysts

About Norwegian Air Shuttle

Provides air travel services in Norway and internationally.What are the underlying business or industry changes driving this perspective?

The growth in passenger numbers and market share in Norway, along with increasing corporate travel agreements, indicates a robust demand for Norwegian Air Shuttle's services, suggesting potential revenue growth in the future.
The acquisition of Wideroe and the resulting operational synergies, as well as the launch of a new distribution platform, are expected to streamline operations and enhance efficiency, potentially improving net margins.
The introduction of Program X, focusing on cost reduction and revenue initiatives, suggests that Norwegian Air Shuttle is committed to enhancing profitability, likely impacting earnings positively in the coming years.
The anticipated positive impact of macroeconomic factors such as potential real wage growth and falling interest rates in Scandinavia could boost travel demand, potentially increasing revenue for Norwegian Air Shuttle.
The favorable outcomes related to fleet management and delivery of new aircraft by Boeing, amidst a market with reduced capacity from competitors due to engine issues, could support stable or improved yields, positively affecting future earnings.

Norwegian Air Shuttle Earnings and Revenue Growth

Norwegian Air Shuttle Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Norwegian Air Shuttle's revenue will grow by 5.8% annually over the next 3 years.
Analysts assume that profit margins will increase from 4.9% today to 5.9% in 3 years time.
Analysts expect earnings to reach NOK 2.6 billion (and earnings per share of NOK 2.41) by about September 2028, up from NOK 1.8 billion today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as NOK3.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 11.6x on those 2028 earnings, up from 9.6x today. This future PE is greater than the current PE for the GB Airlines industry at 9.6x.
Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.91%, as per the Simply Wall St company report.

Norwegian Air Shuttle Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Norwegian Air Shuttle’s current challenges with punctuality (78.4%) and regularity (slightly below target) could negatively affect passenger satisfaction and retention, potentially impacting future revenue growth.
The ongoing legal battle over ETS obligations and potential penalties create uncertainty and financial risk, which could affect earnings if resolved unfavorably.
Fluctuations in the value of the Norwegian krone have negatively impacted operating expenses and liabilities, indicating foreign exchange exposure risks that could affect net margins.
Although the company has secured financing for its aircraft orders, uncertainties regarding aircraft deliveries from Boeing and engine issues with Airbus could disrupt fleet expansion plans, impacting operational capacity and revenue potential.
Competition in corporate travel markets remains intense, particularly with SAS’s aggressive pricing strategy, which could affect Norwegian’s ability to maintain or grow corporate travel revenue streams.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of NOK17.3 for Norwegian Air Shuttle based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK19.0, and the most bearish reporting a price target of just NOK13.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be NOK43.4 billion, earnings will come to NOK2.6 billion, and it would be trading on a PE ratio of 11.6x, assuming you use a discount rate of 9.9%.
Given the current share price of NOK16.42, the analyst price target of NOK17.3 is 5.1% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Boost Norwegian Air Shuttle Price Target Citing Strong Short Haul and Leisure Outlook