Reuters: Hot Stocks: STOCKS NEWS SINGAPORE-CIMB downgrades Tiger Airways to 'neutral'

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STOCKS NEWS SINGAPORE-CIMB downgrades Tiger Airways to 'neutral' Sep 17th 2012, 01:56 Sun Sep 16, 2012 9:56pm EDT CIMB Research downgraded Tiger Airways to 'neutral' from 'outperform' and cut its target price to S$0.81 from S$0.90 as tougher competition in Australia and higher fuel prices could delay it from turning profitable. By 0940 GMT, Tiger shares were 0.7 percent higher at S$0.745, and have gained 17.3 percent so far this year, compared to the FT ST Consumer Services Index's 3.2 percent rise. "Tiger's fortunes ride on Tiger Australia breaking even, which could be delayed by pressure from the ongoing Qantas-Virgin rivalry," said CIMB. The brokerage expects bigger losses for Tiger in fiscal 2013 and cut its 2014-15 earnings per share estimate by 6 percent to reflect lower yields and losses in Philippines-based unit SEAIR. The next few years are expected to be capital intensive for Tiger as it bears lease rentals on behalf of its associates until they turn profitable, said CIMB. "While Australia's outlook seems challenging, Tiger Australia should still be able to regain profitability in 2014" due to encouraging advance bookings and improving load factors, said CIMB.

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