Macquarie analysts have raised the price target on Air New Zealand (ASX:AIR) from NZ$0.90 to NZ$0.98, citing materially lower net debt for the carrier as the primary factor.

Earnings per share (EPS) estimates for FY24 and FY25 have also been increased by 1% and 3% respectively.

The key highlight of the operating cash flow was the reduction in net debt, says Macquarie.

The brokerage also forecasts an additional capital of around NZ$300 million to NZ$650 million, which could be returned to shareholders in FY25.

This excess capital could support the company in replacing its Boeing 777 Dreamliner fleet.

The stock of Air New Zealand (ASX:AIR) has seen a 5.4% rise this year as of the last close.

Air New Zealand (ASX:AIR) is a prominent airline based in New Zealand offering both domestic and international flights.