Icelandair Group hf. – Valuation as of 1 Jan 2026

Valuation Summary

• The value per share as of 1 January 2026 is estimated at 1.77 ISK (USD 1 = ISK 125).
• The valuation is based on a ten-year forecast using the residual income method, with a 10% nominal required return on equity and a 4% terminal growth rate (1% real).
• The share value remains largely unchanged from the previous valuation.

Key Assumptions

• Operating revenues grow by an average of 5.8% per year (2.5% real).
• EBIT is 2% in 2026 and rises to 5% from 2030 onwards throughout the forecast period.
• Depreciation of operating assets, right-of-use assets, and intangible assets (excluding goodwill) averages 16% per year.
• The average cost of debt is 6.6%, with financing predominantly in USD.
• Associates deliver a 12% return on the book value of their equity stake and pay out about 70% of earnings as dividends.
• Income tax is 20%, calculated on profit excluding the share of results from associates.
• Investment in operating assets, right-of-use assets, and intangible assets (excluding goodwill) follows revenue growth, annual investment averages 18.8% of revenues.
• Dividend payments amount to 40% of prior year owners’ total comprehensive income from 2031 onwards.
• The equity ratio increases from 15.4% at year-end 2025 to 27.2% at year-end 2035.
• Other general assumptions are presented under “Valuation.”.