CLSA released a research report indicating that it has raised the target price-to-book ratio for Cathay Pacific (00293) from 1.41 times to 1.61 times, increasing the target price from HK$13.5 to HK$16.4. The rating has been upgraded from "Hold" to "Outperform."

This decision follows Cathay Pacific's recently released earnings forecast for the first half of 2026, which has made CLSA more optimistic about its cargo business performance. Meanwhile, demand for its passenger business remains robust, with yield demonstrating resilience. Considering updates to yield assumptions and the proposed disposal gain from Air China (00753) in the first half of 2026, CLSA has raised its net profit forecasts for Cathay Pacific for 2026 and 2027 by 54% and 37%, respectively.

CLSA expects that profit attributable to Cathay Pacific's shareholders will reach HK$13.5 billion in 2026 and HK$14.8 billion in 2027. It also forecasts that the return on equity (ROE) will rise to 23.9% in 2027, marking a new high since 2010.