Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: Citigroup
But it keeps its Buy recommendation on the stock: “We continue to like Tiger Airways as we see its well-executed business model (in terms of cost control and profit generation) leveraging on the multi-year structural demand growth in low cost carrier traffic. Tiger is also an under-recognized proxy to the strong tourist arrivals into Singapore, mainly driven by the Integrated Resorts.”
While the house lowers its FY11-FY12 EPS estimates by 9%-11% on higher fuel costs, “we note that Tiger may be able to pass on some of its costs by raising ticket prices or increasing ancillary revenues.”
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: Citigroup
Citigroup cuts Tiger Airways’ (J7X.SG) target price to $2.15 from $2.40, to factor in higher fuel costs, changes to capital structure (sale and leaseback of four aircraft in 2011), and the impact from the Queensland floods and cyclone.
But it keeps its Buy recommendation on the stock: “We continue to like Tiger Airways as we see its well-executed business model (in terms of cost control and profit generation) leveraging on the multi-year structural demand growth in low cost carrier traffic. Tiger is also an under-recognized proxy to the strong tourist arrivals into Singapore, mainly driven by the Integrated Resorts.”
While the house lowers its FY11-FY12 EPS estimates by 9%-11% on higher fuel costs, “we note that Tiger may be able to pass on some of its costs by raising ticket prices or increasing ancillary revenues.”
It notes Tiger is the market leader in developing new ancillary revenue streams, with 3Q11 ancillary revenues +11.5% on quarter.
The stock is +1.2% at $1.67.
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