Cathay Pacific shares jump on broker upgrade and Qantas profit forecast slashed by UBS
The broker increased its target price from HKD7 to HKD13, saying Asia's third-largest airline would outperform peers with a marginal profit in 2009, aided by its improved average load factor, cost-cutting measures (including capacity rationalisation) and mark-to-market fuel hedging gains.
Also gaining on Tuesday was Qantas, whose shares rose 0.8%. RBS stated it expects Qantas’ FY2009-10 pre tax profit to fall by almost 40% to AUD172 million and net profit to improve only marginally from 2008/09 levels (+1.9% to AUD85 million), due to the devastating combination of a weak pricing and demand environment and generally increasing oil prices (although oil prices have now fallen for five consecutive days).
RBS also downgraded the carrier’s pre-tax profit for FY2011 by 26.6% to AUD280 million and forecast yield to continue to weaken in FY2010, falling 2.4% domestically and 9% on international services. RBS also lowered Qantas share target price from AUD1.70/share to AUD1.66/share, on expectations of continued market weakness. Qantas shares closed at AUD1.89 yesterday, and have fallen marginally in morning trading today.
Elsewhere, Singapore Airlines gained 1.6% yesterday, while shares in Japan Airlines were down 0.6%.
Asia Pacific selected airlines daily share price movements (% change): 07-Jul-09