Pie in the face for Marilyn?
Has the good profit result announced by Cullen Airlines given Marilyn a pie in the face? A vol-au-vent maybe.
Cullen Airlines has been lucky. Their biggest competitor Queer and Nasty Airlines is run by a bunch of clueless idiots, and there has been no customer push-back from their roll out of the thrombosis class cabin layout.
Their are continuing concerns. The use of Airbus A380's by competitors on North American routes would see customers deserting Cullen Airlines. Jetstars Asia strategy is stuttering leaving them with a fleet of seriously underutilised A320's. These aircraft could be redeployed in Aoteroa domestically or criss crossing the ditch. Whether Boeing 787's are the right aircraft is still unknown, and of most concern Cullen Airlines are bankrolling the ruinous capacity war between Virgin(Under Arm Bowlers Division) and Queer and Nasty Airlines across the ditch
Queer and Nasty Airlines are due to to announce their profit result later today. It is widely expected to be a shocker. If it forces change on this airline it may not be to Cullen Airlines advantage.
Memo to John Key, sell the lot to Etihad, after today the taxpayers will get a better price.
Boop boop de do
Marilyn
Please ensure that your seat-belt is fastened when in your seat
Quote:
Originally Posted by
silverblizzard888
Surely the prospect of 300 million profits for the year would cause the price to be much higher than it is now. The P/E is quite low right now, for such a forward looking market, would that possibility not be accounted for. At $1.80 that is still a very cheap price when comparing the P/E to other stocks.
Well that normalised $300M+ before tax will be $210M+ after tax so it is already on a P/E of 9.42 or better.
Take the SP to $2.10 and the P/E is 11.0
Then where does it go?
Airline profits tend to be all over the place and the further forward you try and predict the greater the possible variations, but you start factoring in a major downturn.
So they trade on nice low multiples to counter the higher risk (than more boring stocks).
Best Wishes
Paper Tiger