Wednesday, November 10, 2010

SIA - JPMorgan raises SIA target to $20 from $17

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD
Research House: JP Morgan Chase


JPMorgan raises Singapore Airlines (C6L.SG) target to $20.00 from $17.00 on rollover to 1.6X December 2011 P/BV. Keeps at Overweight. Trims FY11-13 earnings estimates by around 11%, mainly to factor in higher average fuel prices. 



“Even then, we expect SIA to return to peak cycle earnings in FY12 with an ROE of 14%.” Says valuations attractive at only 10% above break-up value (estimates potential ‘liquidation’ value of SIA around $15/share) also trading at 25% discount to Asian airline sector average on adjusted EV/EBITDAR basis despite its above sector average margins. 

Shares down 0.6% at $16.22.

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