Kiatnakin Phatra Securities (KKPS) has upgraded its recommendation for Thai Airways International Public Company Limited (SET: THAI) to “Buy” and raised its target price to THB 9.2 from THB 7, citing a stronger second-half 2026 outlook and improving profit momentum.
The brokerage increased its 2026 – 2028 earnings forecasts by 1 – 5% and rolled its valuation forward to 2027. The revised target implies 2027 price-to-earnings and enterprise value-to-EBITDA multiples of 11.3 times and 4.5 times, respectively, representing a 20% discount to regional peers.
KKPS narrowed that discount from 30% as the outlook improved, while retaining an allowance for potential selling pressure from creditors. With THAI trading at seven times the estimated 2027 P/E, the brokerage views the risk-reward balance as positive.
Passenger yield rose 20% year-on-year in the second quarter of 2026, the largest increase among regional airlines, suggesting customers have absorbed higher ticket prices. THAI recorded a 6% operating profit margin, compared with 4% for peers.
The decline in revenue passenger kilometres (RPK) narrowed from 11% year-on-year in the second quarter to 2% in July. KKPS sees potential for growth to resume from August, while passenger yield should remain around 10% above the previous year’s level.
THAI has also gained market share as low-cost airlines reduced capacity on short-haul international and domestic routes. Meanwhile, Middle East–Asia RPK fell 9% year-on-year in July despite Middle Eastern carriers restoring capacity, while Europe–Asia RPK rose 12%. KKPS said this suggested passengers were shifting toward direct flights rather than connections through Gulf hubs.
The brokerage expects core profit to rise from THB 1.2 billion in the second quarter to THB 2 – 3 billion in the third quarter, before accelerating further in 4Q26 and 1Q27. The analyst forecasts 24% profit growth in 2027, with a key assumption that spot jet fuel prices decline from $145 per barrel in 2025 to $110 in 2026.
Notably, a prolonged Middle East conflict keeping jet fuel prices elevated remains the key downside risk.
