CPCAF - Cathay Pacific: Buy Case Remains, Price Target Trimmed
2025-05-07 18:01:54 ET
Summary
- Cathay Pacific Airways Limited's 2024 revenues grew 10.5%, driven by higher capacity but offset by lower yields and increased operating expenses, resulting in stable profits year-on-year.
- Despite a challenging trade environment and elevated costs, Cathay Pacific's stock shows significant upside potential, with a 45% appreciation forecasted based on a 5x EV/EBITDA multiple.
- Operational challenges include eroding unit revenues due to increased capacity and ongoing trade uncertainties affecting both passenger and cargo operations.
- I maintain a buy rating for CPCAY stock, expecting growth ahead despite challenges, but trim the price target by a third due to lease debt inclusion.
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Cathay Pacific: Buy Case Remains, Price Target Trimmed