UBS: Increase Cathay Pacific's (00293) target price by 15% to HK$19.4, estimated annual profit to reach a record high of $13.9 billion

The Zhitong Finance App learned that UBS released a research report saying that although fuel costs rose sharply by 58% year on year in the first half of the year and accounted for 38% of Cathay Pacific (00293) operating expenses, the company's core net profit increased 45% year over year. The bank pointed out that since the second half of the year is a seasonal peak season, and due to the influence of the geopolitical situation in the Middle East, fuel prices may drop, and it is expected that there will still be room for further growth in the second half of the year. The bank expects the company's annual net profit to reach HK$13.9 billion, a year-on-year increase of 28%, a record high. UBS raised Cathay Pacific's 2026-28 earnings estimate by 10% to 21%, and the operating profit margin for the period is expected to reach 13 to 15%. The bank maintained the company's “buy” rating and raised the target price by 15% from HK$16.9 to HK$19.4.