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Investing.com - Citi has initiated coverage on Virgin Australia Holdings Ltd (ASX:VGN) with a Neutral rating and a price target of AUD3.30 per share.
The research firm notes that while the domestic aviation market remains robust with strong load factors and disciplined capacity, the higher-than-historical fare growth suggests passenger volumes may slow below trend rates.
Citi points out that Virgin Australia’s forward flight schedule is largely equal to its historical cancellation rate, which could indicate limitations in the market’s ability to sustain both price and volume growth at or above average levels.
The analysis suggests a cautious outlook on the airline’s growth potential despite the current strength in the domestic market, balancing positive indicators against potential headwinds.
The Neutral rating reflects Citi’s balanced view on Virgin Australia’s prospects in the current aviation environment, with the AUD3.30 price target establishing the firm’s valuation benchmark for the stock.
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