April 26, 2024

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[THE INVESTOR] Jeju Air will post better earnings in the fourth quarter, said Korea Investment and Securities on Nov. 28, maintaining a “buy” recommendation and 46,000 won (US$42.40) target price.

In addition to a low baseline effect from being a low season, it has gained from long Chuseok holidays and average price hike of international passenger rates, said analyst Choi Go-un.

The aviation industry is susceptible to outside factors and the growth potential of low-cost carriers has been underestimated, but the IPO of its rival Jin Air elevated attention for the LCC industry, underlined the analyst. 

Jeju Air’s earnings per share will spike 50 percent this year and 15 percent next year while its current stock price remains at 10 times of its price-earnings ratio, noted Choi, adding that Jin Air’s flotation will alleviate the discount for LCC operators. 

By Hwang You-mee (glamazon@heraldcorp.com)