Since the beginning of June, Cathay’s stock has increased 21%, making it the strongest performer among peers in Asia and the first time since December that Cathay has outperformed Singapore Airlines for two months in a row.
As Hong Kong’s main carrier resumes operations following years of pandemic limitations, the fortunes of Cathay Pacific Airways Ltd. and Singapore Airlines Ltd. may continue to turn around.
Due to low values and the possibility of a return to profitability, a spike in buy recommendations for Cathay in July caused the ratio of bullish views to reach its highest level in more than a decade. Singapore Airlines’ reputation has suffered as a result of a wave of downgrades that have occurred since June because of valuation worries.
Following its profit estimate for the first half of 2023, which will halt a stretch of losses as the airline sputtered under the city’s severe travel restrictions, the battered Hong Kong carrier’s prospects have begun to improve. In recent weeks, Cathay’s shares have begun to outperform those of its competitor. If its upcoming earnings on August 9 continue this upward trend, the stock price may rise much higher.
According to analysts at JPMorgan Chase & Co., including Karen Li, Cathay’s post-pandemic profits strength has been “underestimated” and there is “room for upward Street earnings revisions.” The carrier maintaining its dominant market share in Hong Kong is a significant plus, placing it in a prime position to profit from mainlanders’ increased demand for long-haul transit flights, Li added.
Since the beginning of June, Cathay’s stock has increased 21%, making it the strongest performer among peers in Asia and the first time since December that Cathay has outperformed Singapore Airlines for two months in a row. Singapore Airlines, on the other hand, has increased 11% over this time, outpacing Cathay Pacific’s gains so far this year.
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