Cebu Air: Upgrade To Strong Buy On Cash Flow Performance (Rating Upgrade)

2025-03-25 15:28:28 ET

Summary

• Cebu Pacific's stock is upgraded to a strong buy due to improved EBITDA estimates, cash flow performance, and a share repurchase program.
• Despite a 14% drop in OTC value, the stock rose 12% on the Philippine Stock Exchange, reflecting better liquidity and currency adjustments.
• Operational challenges include grounded aircraft due to engine issues and cost pressures, but long-term projections for 2025 are optimistic.
• Cebu Pacific's focus on low-cost, domestic, and Asia-Pacific routes, combined with significant fleet growth, positions it well for future demand.

In September, I added Cebu Air, Inc. ( OTCPK:CEBUY ) also known as Cebu Pacific to my coverage. Since then, the OTC ticker CEBUY lost 14% of its value. However, it should be noted that this is largely due to the lack of liquidity in the OTC listings....

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