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<Research>JPM Expects CATHAY PAC AIR (00293.HK) to Navigate Mideast Turmoil, Keeps Overweight Rating
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Since the escalation of the Middle East conflict in March, the share price of CATHAY PAC AIR (00293.HK) has fallen 14%, broadly in line with the global airline sector, JPMorgan issued a research report saying. The broker believed that this decline is unjustified, as CATHAY PAC AIR has stronger operating fundamentals than its peers and earnings capability under the current market environment. Therefore, JPMorgan rated CATHAY PAC AIR at Overweight, with a target price of $18. The Middle East conflict created a capacity vacuum on major long-haul routes, with major Gulf carriers significantly cutting flights due to airspace closures and fuel shortages, the report added. In contrast, CATHAY PAC AIR has unique network advantages, including access to Russian airspace, a prudent fuel hedging policy and a full-service model, enabling it to capture incremental demand and sustain profit margins. Auto-translated by AI AASTOCKS Financial News |
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