Japan Airlines: We raise rating to Buy, see less risk of rising fuel prices

Research evidence excerpt

Japan Airlines: We raise rating to Buy, see less risk of rising fuel prices

Global Markets Research

1 July 2026Japan Airlines

9201.T 9201 JP / EQUITY: JAPAN TRANSPORTATION

RatingWe raise rating to Buy, see less risk of rising fuel

Up from Neutral Buyprices

Target price

We highlight structural changes including introduction of fuel surcharges Increased from 2,600 JPY 3,700

on domestic routes in 28/3 and cuts to flights on unprofitable routes

Closing price JPY 2,850.0We raise rating to Buy, think now is the time to focus on profit growth 30 June 2026

We raise our rating on Japan Airlines from Neutral to Buy. This is because: (1) fuel prices are

Implied upside +29.8%trending downward with countries diversifying their fuel procurement sources and the US and

Iran having signed a memorandum of understanding (MOU) that sets the stage for a permanent

ceasefire; (2) the company plans to introduce fuel surcharges on domestic routes in 28/3, which

will reduce risks from forex movements and high fuel costs; (3) margins look likely to improve

Relative performance chartthanks to a reduction in flights on unprofitable domestic routes, and (4) we expect the number

of passengers on international routes to continue growing, with support from a rise in inbound

travelers to Japan and robust business travel demand. Japan Airlines also has a distinctive

profit growth driver in its mileage business. It has embarked upon new initiatives including

increasing miles earned at third parties and investments aimed at enhancing services, and we

await the results of these efforts. We obtain our new target price of ¥3,700 by multiplying our

28/3 EPS forecast by a P/E of around 13x, a roughly 20–30% discount to the benchmark

Russell/Nomura Large Cap (ex financials) average.