Turkish Airlines Shares Are No Longer Cheap — But TKHVY Still Has Upside

Turkish Airlines, or Turk Hava Yollari (OTCMKTS: TKHVY), offers air transportation for domestic and international passengers and cargo.

Most recently, political uncertainty grounded the Turkish Airlines stock.

All after presidential candidate Ekrem Imamoglu, Istanbul’s most popular opposition mayor considered to be President Erdogan’s biggest political threat was arrested.

According to the Associated Press, he was arrested on investigations into alleged corruption.

Others say the arrest “as part of a broader campaign to undermine the mayor and eliminate a key challenger to Erdogan before the next presidential elections. The move has raised concerns about the fairness of future elections under Erdogan who has grown increasingly authoritarian during his more than two-decade rule as prime minister and president,” they added.

All of which lead to a rout in the Turkish lira, stocks, and bonds.

It even led to two market-wide circuit breakers on Turkey’s key exchange with the pullback compared to the 2008 Lehman Brothers collapse.

Buybacks, Dividends, and Solid Earnings Will Help the Airline Stock Fly 

With a good deal of negativity now priced into the stock, Turkish Airlines recently announced plans for a nine billion Turkish Lira ($234.2 million) stock buyback program.

Plus, recent earnings haven’t been too shabby.

For full year 2024, the company showed a profit of $2.4 billion – with part of that going back to shareholders by way of buybacks and $260 million in dividends. Total revenue of $22.7 billion, up 8.2% year over year. It also saw a net profit margin of 10.5%.

Its EBITDA profit margin also climbed to 25.3%.

Also, while passenger revenue only increased by 4%, its cargo business saw revenue surge by 35% year over year. In addition, as noted by AeroTime.aero, “Turkish Cargo, the airline’s freight division, operates a fleet of 24 dedicated freighters and has seen its business increase by 20% in 2024, already making it one of the world’s three top air cargo operators.”

Turkish Airlines Stock is a Buy

After a recent tension-fueled pullback in the TKVHY stock, it’s a buy.

For one, a good deal of negativity has been priced into the stock. Two, earnings growth has been and will continue to be strong – with a recent net profit of $2.4 billion. Three, the company will pay out $260 million in dividends. Plus, it plans to buy back $234.2 million worth of stock.

Fueling even more upside, the company expects passenger capacity to increase by 6% to 8% above 2024 numbers. It expects to see more than 91 million passengers. It also expects to see a 6% to 8% jump in total revenues above 2024 numbers. And an EBITDAR margin of between 22% and 24%.