0135 GMT - Morningstar analysts Angus Hewitt and Leo Wang say Virgin Australia's IPO price of A$2.90/share is too expensive. To justify that price, Virgin needs to increase market share at the expense of Qantas without lowering prices. Or the industry as a whole needs to maintain elevated load factors and pricing over the next decade, which Hewitt and Wang say is unlikely. Although Australian airlines are doing well currently, the analysts expect there to be more competition in the medium term. "We think conditions are cyclically, rather than structurally, favorable," they say. They argue that a price of A$2.60/share would be more reasonable, though they give a hat tip to main owner Bain Capital for selling at an opportune time. (mike.cherney@wsj.com)

(END) Dow Jones Newswires

June 16, 2025 21:35 ET (01:35 GMT)

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