[THE INVESTOR] Korean Air beat market expectations with its third-quarter earnings in spite of an unfavorable environment, said Korea Investment and Securities on Nov. 14 maintaining a “buy” recommendation and 39,000 won (US$34.39) target price.
Its revenue and operating profit were higher than market consensus, an earnings surprise in aviation industry that faced fuel price rise and natural disasters in Japan. It has cut down on unviable routes and diversified the revenue structure. The company has the capacity to take a step back from competition and direct its efforts on promoting rates and is relatively resilient against outside variables. Fuel prices are declining and it is time to look at the industry again for attractive valuation, said analyst Choi Go-un.
Investors should monitor changes in jet fuel prices and considering the uncertainties, Korean Air will draw attention first with its stable service portfolio compared to low-cost carriers that are plagued by competition, advised the analyst.
By Hwang You-mee (firstname.lastname@example.org)