Pegasus Airlines (PGSUS TI) - The best is yet to come: Upgrading to Buy
Pegasus reported NI of TRY324m in 2Q19, much higher than BNPPe of TRY50m and RT estimate of TRY85m. The divergence at the bottom-line came from better operational performance and lower effective tax rate of 6% (BNPPe: 22%). Its EBITDA came in at TRY796m in 2Q19, 29% above BNPPe of TRY619m and consensus estimate of TRY605m. Pegasus reported impressive results in 2Q19, backed by a successful strategy of focusing more on int’l flights.
We believe that a strong 2Q19 proves that Pegasus successfully shifted its capacity to international flights and has balanced operational currency mismatch by 2019. Despite impressive outperformance of 92% on a YTD basis, we still see significant upside of 151%. The stock currently trades at 4.0x EV/EBITDAR multiple, implying a 30% discount to its global low-cost carrier peers.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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