SIA: Morgan Stanley maintains O/w but reduce TP to $18.00 from $18.80. House expect difficult qtr but Support from High DPS Yield. Cut EPS estimate by 8-14% as factor in lower traffic growth and higher jet fuel prices.
Expect EPS of 17c for 1Q11, down from 21cin 1Q10 and forecast operating profit at $167mn for 1Q11 (-41%), due mainly to the sharp rise in jet fuel of 20% in the April-June 11 qtr and lower traffic growth in 1Q11. Potential downside risks to TP include a double-dip in nx yr’s global economic growth and the emergence of successful low-cost airlines in Asia.
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