[Click eStock] "Jeju Air, Risk of Travel Demand Decline Due to Economic Slowdown... Target Price Down"

On the 14th, KB Securities lowered the target price for Jeju Air by 12.5% to 14,000 KRW, while maintaining a 'Buy' rating.

Jeju Air's operating profit for 2024 is expected to reach 165.3 billion KRW, an 8.2% increase from this year. This exceeds the market consensus by 28%, but is 19.7% below KB Securities' previous forecast. Next year, with declines in exchange rates and oil prices, cost reductions are anticipated, leading to an increase in operating profit. However, despite the cost decreases, favorable aircraft supply conditions mean that domestic and international passenger yields are expected to fall by only 0.4% and 0.7% respectively compared to the previous year.

Seongjin Kang, a researcher at KB Securities, stated, "Jeju Air can procure more aircraft at lower costs than other domestic airlines due to the aircraft purchase contract signed with Boeing in 2018," but added, "Risks include decreased overseas travel demand among Koreans due to economic slowdown, sharp rises in exchange rates and oil prices, and delays in Boeing B737 deliveries."