VBA 0.00% 35.5¢ virgin blue holdings limited

analyst upgrades, page-12

  1. 670 Posts.
    Deutsche getting on the bandwagon - these guys are probably the worst analysts in the business - 12 month Target in their 28 July update was 23c which was then then theoretical ex - price from the SPP which had just been announced. I don't think it traded below 27c and then... well the rest is history. I guess they only missed a chance to more than double their clients money - but hey that's why they get paid the big bucks ;-)!


    Deutsche Bank - Equity Research
    >
    > Virgin Blue {Ticker: VBA.AX, Closing Price: 0.52, Target Price:
    > 0.60, Recommendation: Hold}
    >
    > * FY10 PBT forecast of $41.0m, new TP of $0.60ps
    >
    > VBA has revised its FY10 PBT guidance from break-even to profitable
    > but avoided quoting a specific number. We think this reflects the
    > uncertainty in its near term outlook despite VBA acknowledging that it
    > is currently operating profitably. We have revisited our forecasts,
    > noted the new guidance as a continued sign of better domestic
    > conditions in aviation and we now forecast an FY10 PBT of $41.0m (-$1m
    > old) based on increased passengers, better yield and lower interest
    > costs. Our new $0.60ps TP ($0.33ps old) reflect these improvements.
    > HOLD on low TSR.
    >
    > * Lack of numerical guidance points to continued near term uncertainty
    >
    > We note that while VBA has guided for a profit in FY10 at its AGM, the
    > lack of a numerical figure articulates that near term operational
    > challenges still exist. We forecast VBA domestic to deliver an FY10
    > PBT of $164.0m, countered by pre-tax losses of - $123.0m from its
    > international operations (incl domestic NZ). Key drivers for the
    > domestic performance are a strong 81% load factor and revised FY10
    > yield of -1.0%pcp (-1.7%pcp old).
    >
    > * V Australia continues to de-risk & 50% of its DCF value included in
    > TP setting
    >
    > VBA's international performance including that of V Australia (based
    > on company guidance & recent DB Australasian Transport Conference
    > industry feedback) is likely to remain weak for the foreseeable future
    > although there are emerging signs of the outlook de-risking.
    > We value V Australia at circa 13cps FY10 DCF (20cps FY11) and with the
    > recent launch of the airline plus the progresses thus far in getting
    > approvals for the strategic alliance with Delta Airlines, we have now
    > included 50% of our V Australia valuation into our TP for VBA group.
    >
    > * Valuation of $0.60ps; Key risks are V Australia execution & yield
    > recovery
    >
    > We value VBA using a combination of reintroduced DCF (13.7% COE) &
    > peer PE (12.8x FY10) methods. Key risks include: forward bookings &
    > yield outlook, fuel price, rates & FX changes, global shocks (e.g.
    > terrorism, pandemic) and V Australia growth execution including V.
    > Aus-Delta JV regulatory approval (details, p.5).
 
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