BofA update shows where active managers are putting money
Investing.com - JPMorgan downgraded Cathay Pacific Airways Ltd . (HK:293) (OTC:CPCAY) from Neutral to Underweight on Wednesday, while slightly raising its price target to HK$8.20 from HK$8.10.
The downgrade follows Cathay Pacific’s interim results release, which missed market expectations and triggered a significant 9% drop in the airline’s stock during Wednesday’s afternoon trading session, underperforming the flat Hang Seng Index.
JPMorgan identified several factors behind the disappointing results, including a substantial 12.0% year-over-year decline in passenger yield during the first half of 2025, alongside increased operational costs and competitive pressures.
The investment bank noted that Cathay Pacific is prioritizing fleet growth and modernization following its balance sheet normalization, pointing to recent orders for Boeing (NYSE:BA) 777-9 jets and other aircraft that have substantially increased its order book.
Despite strong operating cash flow in the first half of 2025, JPMorgan observed that Cathay’s gearing remains largely unchanged while its payout was slightly reduced, leading the firm to lower its estimates to 5-8% below consensus for fiscal years 2025-2027.
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