Tiger Airways: UBS INITIATE with Sell Call and $1.50 TP. Tip LLC as most vulnerable carrier. Add of at least 3 competitors on each of its key routes which competes directly with grp. Concerned about Tiger’s profitability in FY12/13 and doubt Co’s ability to maintain its disciplined strategy of growing business…..
Note that Co. does not levy any fuel surcharge and estimate it has hedged around half of its fuel consumption for nxt 5 qtrs. Estimate Co’s FY12 post-hedged fuel price will increase 19% YoY and its non-fuel unit costs will decline 1%, but that interest costs will rise as it takes more planes onto its balance sheet.
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