Lyon: Upgraded CATHAY PAC AIR (00293) to "outperform the market" with a target price raised to HK$16.4.

Lyon released a research report stating that the target market rate of Cathay Pacific Airways (00293) has been raised from 1.41 times to 1.61 times, and the target price has been raised from HK$13.5 to HK$16.4. The rating has been upgraded from "hold" to "outperform". Cathay Pacific's recent profit forecast for the first half of 2026 has made the bank more optimistic about its freight business performance, while its passenger business demand remains stable with resilient profitability. Taking into account updated profitability assumptions and factors such as the proposed disposal income of Air China (00753) in the first half of 2026, the bank has raised its net profit forecasts for Cathay Pacific in 2026 and 2027 by 54% and 37% respectively. The bank expects that Cathay Pacific's shareholders' profit will reach HK$13.5 billion in 2026 and HK$14.8 billion in 2027. It is expected that the return on equity (ROE) in 2027 will increase to 23.9%, reaching a new high since 2010.