SYD - Morgans rates as Hold
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International passenger growth is running at above long-term trend rates in the first half, up 5.2%. Domestic passenger growth is 2.1%. Morgans forecasts an 8% increase in revenue for the first half that should generate around a 9% increase in operating earnings.
Given the company is considering whether to institute a distribution "glide path" into the initial taxpaying years early next decade, the broker does not expect an upgrade to guidance at 37.5c.
While the broker considers the stock has defensive attributes and a strong balance sheet there is insufficient upside to justify a more aggressive stance. Morgans maintains a Hold rating and raises the target to $7.30 from $7.12.
Target price is $7.30.Current Price is $7.18. Difference: $0.12 - (brackets indicate current price is over target). If SYD meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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