Virgin Australia Strategy working in an uncertain backdrop: initiate at Neutral

研报英文原文证据摘录

Virgin Australia Strategy working in an uncertain backdrop: initiate at Neutral

J P M O R G A N Asia Pacific Equity Research

29 May 2026

Initiation

Virgin Australia Neutral

VGN.AX, VGN AU

Strategy working in an uncertain backdrop: initiate at Price (28 May 26):A$2.60

Neutral Price Target (May-27):A$2.85

We initiate coverage of Virgin Australia (VGN) with a Neutral rating and A$2.85 Australia

price target. We see reasons to be positive: (1) VGN's simplified business model; (2)

Australia Industrials

positive medium-term yield growth supported by an under-supplied and structurally

protected domestic market; (3) a relatively strong near-term fuel hedging position; Lee Power AC

and (4) a Transformation Program, which should provide a buffer against elevated (61-2) 9003-8725

lee.power@jpmorgan.com

industry inflation. While the structural backdrop is encouraging, we initiate with

Nick Torelli

Neutral given more elevated balance sheet leverage (relative to QAN) on a clouded (61-4) 6817-5219

near-term outlook, and Virgin's concentrated domestic exposure, which limits its nick.torelli@jpmorgan.com

ability to benefit from ongoing Middle East logistical disruptions (and minimises the Dylan Adrian

buffer to any domestic demand destruction). Our May-27 price target is A$2.85, based (61-2) 9003-7397

on an average of DCF-based and relative P/E valuations. dylan.adrian@jpmorgan.com

J.P. Morgan Securities Australia Limited

• Simplified business model underpins more durable earnings and a re-

rating opportunity: VGN now operates a streamlined B737 and E190 fleet on

core domestic and select short-haul international routes, targeting premium Half Yearly Forecasts (FYE Jun)

leisure, SME, and value-conscious corporate customers. We think VGN is a Adj. PBT (A$ mn)

2025A 2026E 2027E