EQUITY RESEARCH: NORWEGIAN AIR SHUTTLE

Norwegian Air Shuttle ("Norwegian," "NAS," or the "Company") is Europe’s fourth- largest low-cost airline, primarily focused on passenger transport with supplementary operations in ground handling and limited cargo services. The Company takes pride in its notable improvements in punctuality and regularity, which have earned it several corporate partnerships in the Nordic region. This report issues a HOLD recommendation with a 2025YE price target of NOK 15.8/Share, derived from a Discounted Cash Flow (DCF) model. This represents an upside potential of 21.8%, corresponding to an annualized of 17.1%, from the closing price of NOK 12.96/Share, as of October 1st, 2024, however, with an high risk. The recommendation is primarily supported by: i) the acquisition of Widerøe, a local Norwegian carrier with extensive ground handling operations, and the resulting synergies and ii) the Company's initiatives toward expanding and modernizing its aircraft fleet, notably transitioning from leasing to ownership. However, several factors contribute for the high-risk recommendation, including: i) delays in Boeing aircraft deliveries, ii) high sensitivity to discount rate fluctuations, and iii) the inherently cyclical nature of the airline industry, further exacerbated by a volatile global economic outlook. The Company’s valuation was conducted through an integrated Free Cash Flow to the Firm (FCFF) model, complemented by a Flow to Equity (FTE) and multiples-based approach.