rbs australia rates the stock as buy

BY BROKER NEWS - 27/01/2011

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Management's guidance for the year is a little bit below what RBS had penciled in, even though the analysts comment it was "in line". Regardless, the analysts see the glass as half full. They acknowledge floods in Queensland are likely to impact in H2 too, but in their eyes investing in Virgin Blue is all about FY12 and the broker thinks the story for next year looks much more promising.

Short term it would appear market consensus was some 25% higher, so estimates are likely to be cut in the days ahead. It goes without saying that this might keep a lid on short term price movements. Buy rating maintained. Target lost 1c and now sits at $0.59.

Note that on current forecasts earnings per share will more than double in FY12.

Target price is $0.59.Current Price is $0.42. Difference: $0.18 - (brackets indicate current price is over target). If VBA meets the RBS Australia target it will return approximately 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).


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