Stock Name: SATS
Company Name: SATS LTD.
CIMB in a July 19 research report says: "We expect SATS to be swept into some turbulence ahead with headwinds arising from (1) margin squeeze from food inflation and inability to pass through costs in an environment of struggling profitability for main airline clients, and (2) the emergence of a third ground handler in Changi Airport, which could stiffen competition and further erode pricing power.
"At 13.7x CY12 P/E, SATS is trading slightly above its average forward P/E. A slowing aviation industry and margin pressure could spark a de-rating of its share price. We resume coverage with new forecasts. Target price of $2.60, based on 13.1x CY12 P/E, its historical mean since 2004. UNDERPERFORM."
Company Name: SATS LTD.
| Research House: CIMB | Price Call: SELL | Target Price: 2.60 |
CIMB in a July 19 research report says: "We expect SATS to be swept into some turbulence ahead with headwinds arising from (1) margin squeeze from food inflation and inability to pass through costs in an environment of struggling profitability for main airline clients, and (2) the emergence of a third ground handler in Changi Airport, which could stiffen competition and further erode pricing power.
"At 13.7x CY12 P/E, SATS is trading slightly above its average forward P/E. A slowing aviation industry and margin pressure could spark a de-rating of its share price. We resume coverage with new forecasts. Target price of $2.60, based on 13.1x CY12 P/E, its historical mean since 2004. UNDERPERFORM."
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