The traffic update was broadly in line with expectations. Traffic is currently down around -95%. A further $850m in bank debt brings total liquidity to $2.8bn, which UBS expects should comfortably cover the debt burden for the next 12 months.
UBS continues to assume government restrictions will delay the scalable introduction of domestic flights until October and international flights until January 2021, yet acknowledges the extent of revenue disruption remains difficult to predict.
Buy rating and $7.10 target retained. Buy retained.
Sector: Transportation.
Target price is $7.10.Current Price is $6.10. Difference: $1.00 – (brackets indicate current price is over target). If SYD meets the UBS target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
