UPDATE: Raymond James Downgrades Gol Linhas Aereas Inteligentes to Market Perform from Outperform, Changes PT from $6.00 to NM

In a report published Thursday, Raymond James analyst James Parker downgraded Gol Linhas Aereas Inteligentes to Market SA

to Market Perform from Outperform, changing its price target to NM from $6.00. According to the report, the downgrade notes that while the outlook in Brazil for the passenger airline business is strong and improving, the cost side has worsened because of the weakness in currency. As a result, the earnings recovery that was forecast to begin in 1Q14 and move to substantial profits in 2015 is being pushed out a year. “As a result of industry capacity discipline, passenger unit revenue growth (PRASK) in the domestic Brazilian airline market has increased 10-25% in each quarter in 2013,” the report noted. “GOL's PRASK in particular was very strong in 4Q13, up 24% y/y. Capacity discipline continues to support the healthy fare environment, with industry capacity forecast to increase by less than 3% in 2014, following an estimated 2% decline in 2013. Moreover, we believe any additional weakness in the Brazilian currency or economy is likely to prompt even more conservative capacity plans at the three largest carriers - Azul, GOL, and TAM - which together account for over 90% of traffic.” Some highlights from the report included: -Currency and capacity pressure costs -No substantial liquidity threat GOL closed Wednesday at $4.73 with shares trading down at 3.07 percent.