UPDATE: Imperial Capital Initiates Gol Linhas with Outperform on Turnaround Plan Execution
In a report published Monday, Imperial Capital analyst Bob McAdoo initiated coverage on Gol Linhas Aereas Inteligentes SA (NYSE: GOL) with an Outperform rating and $6.00 price target.
In the report, Imperial Capital noted, “Gol is executing its turnaround plan and delivering initial improved results, but this is not reflected in GOL shares. GOL shares seem extremely attractive as investors have yet to appreciate what Gol is doing. Investors are also concerned about the Brazilian public protests and the weaker Real. Most importantly, we believe investors are failing to appreciate the proven positive economic impact of airline capacity reductions. In mid-2012, GOL named a new CEO, Paolo Kakinoff, who has focused on changes should move the company back to profitability, in our view. Included in the changes thus far are the closing of its unprofitable Webjet subsidiary, the elimination of the 21 fuel inefficient B737-300 aircraft, headcount reductions totaling almost 2,000, and capacity reductions that began in mid-2012. As part of this overall effort, Gol has focused its efforts on moving its average fares up, no longer relying on fare cutting as a traffic generating tool.”
Gol Linhas Aereas Inteligentes SA closed on Friday at $3.35.
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