Cathay Pacific Airways (CPCAY) AI Stock Analysis

• Market Cap: $10.86B
• Dividend Yield: 5.05%
• Average Volume (3M): 10.00
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.42
• Revenue Growth: 8.95%
• EPS Growth: 17.01%
• Country: US
• Employees: 30,100
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.69
• Shares Outstanding: 1,344,840,800
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 10
• PEG Ratio: 0.70
• Price to Book (P/B): 1.34
• Price to Sales (P/S): 0.69
• P/FCF Ratio: 5.08
• Enterprise Value/Market Cap: 12.01
• Enterprise Value/Revenue: 1.12
• Enterprise Value/Gross Profit: 4.93
• Enterprise Value/Ebitda: 5.37
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.87
• Revenue Forecast (FY): $15.48B

• Rating: 74 Outperform
• Price Target: $9.50 ▲(25.83% Upside)
• Action: Reiterated Date: 03/13/26
• Date: Action: Reiterated 03/13/26

The score is driven primarily by solid recent financial recovery and cash generation, supported by a very attractive valuation (low P/E and high dividend yield). Offsetting these positives are balance-sheet leverage and cyclicality risks, while technical signals are generally neutral.

Positive Factors

Post‑pandemic profitability

Cathay’s multi‑year rebound to positive margins and rising revenue through 2023–2025 demonstrates restored core operating profitability. Sustained mid‑single to low‑double digit margins provide durable cash earnings to fund operations, network recovery and capex over the next 2–6 months.

Solid cash generation

Consistent positive operating and free cash flow in recent years, with FCF covering a large share of earnings, indicates the business can convert profits into liquidity. That supports sustainable reinvestment, service of obligations and operational resilience across the near term.

Diversified revenue streams

Cathay’s mix of passenger, dedicated cargo operations and a loyalty program provides structural revenue diversification. Cargo and loyalty channels can offset passenger cyclicality and enhance yield stability, supporting more consistent cash flows and demand exposure diversification over months.

Negative Factors

Elevated leverage

Leverage near parity with equity is material for an inherently cyclical airline; it constrains financial flexibility and raises interest/service costs. In a downturn or fuel/currency shock, elevated debt can force capacity cuts or delay fleet and network investments, affecting medium‑term competitiveness.

Margin & earnings cyclicality

The company’s history of sharp margin swings and multi‑year losses during downturns underscores sensitivity to demand, fuel and macro shocks. Even with current recovery, this structural cyclicality raises earnings unpredictability and planning risk for capital allocation over coming months.

Cash‑flow coverage vs debt

Although recent free cash flow is healthy, operating cash flow coverage relative to debt has been well below 1x, indicating limited buffer to rapidly pay down liabilities. This structural weakness increases refinancing and liquidity risk if revenues soften or funding costs rise.

Cathay Pacific Airways Business Overview & Revenue Model

Company Description

Cathay Pacific Airways (CPCAY) is a Hong Kong-based international airline that operates scheduled passenger and cargo services to over 190 destinations worldwide. Founded in 1946, the airline is a member of the Oneworld alliance and is known for its premium service and commitment to safety and quality. CPCAY operates a modern fleet of aircraft, offering both economy and premium travel options, and is involved in various sectors of the aviation industry, including passenger transport, cargo services, and aircraft maintenance.

How the Company Makes Money

Cathay Pacific primarily makes money by selling air transportation and related services across several revenue streams: 1) Passenger revenue (core stream) - Ticket sales: The company earns revenue from selling seats on its flights across different fare classes (e.g., economy and premium cabins). Passenger revenue is influenced by passenger volumes, route network and frequencies, load factors, yield (average fare per passenger), and the mix of leisure vs. corporate demand. - Ancillary and travel-related fees: The airline typically generates additional revenue from items and services associated with travel (e.g., seat selection, baggage and other service fees). If Cathay-specific ancillary breakdowns are not disclosed in the requested context, the exact composition is null. 2) Cargo revenue (Cathay Cargo) - Airfreight and mail: Cathay earns revenue by transporting cargo for freight forwarders, shippers, and postal services using freighter aircraft and belly capacity on passenger flights. Cargo revenue depends on cargo volumes, yields (rate per kilo/tonne), capacity management, and demand tied to global trade and time-sensitive supply chains. 3) Loyalty and customer-related revenue - Loyalty program economics: Airlines commonly earn revenue through their loyalty programs by selling or allocating points/miles to partners and recognizing revenue when points are redeemed; Cathay operates a loyalty program under the Cathay brand. Specific partner names, revenue split, or accounting metrics are null if not available from the provided information. 4) Other airline and services revenue - Additional airline-related services: This may include revenues from services connected to flight operations (e.g., ground handling, catering, maintenance/engineering activities, or other aviation services) where applicable. If Cathay’s reporting does not detail these items in the available data, the precise categories and amounts are null. Key factors influencing earnings - Network and capacity decisions: Route selection, fleet utilization, and frequency drive both passenger and cargo capacity. - Pricing and demand environment: Competitive dynamics, macroeconomic conditions, and travel restrictions (when applicable) affect fares and load factors. - Fuel and currency exposure: Jet fuel costs and foreign-exchange movements can materially affect profitability even when revenue is stable. Significant partnerships - The company participates in industry partnerships (e.g., interline/codeshare arrangements and other commercial partnerships) that can help feed passengers across networks and broaden sales reach. Specific named partnerships are null if not available in the provided information.

Cathay Pacific Airways Financial Statement Overview

Summary

Strong post-pandemic earnings recovery with healthy recent profitability and solid free cash flow in 2023–2025. The main constraints are a relatively debt-heavy balance sheet for a cyclical airline and historical margin/cash-flow volatility through downturns.

Income Statement

Cathay Pacific has delivered a strong post-pandemic earnings recovery, with revenue rising from 2023 to 2025 and profitability remaining healthy in 2024–2025 (net margin ~9–10% and EBIT margin ~12–13%). However, margins have been volatile year-to-year (notably stronger in 2023 than 2025), and the business has a clear history of losses in 2020–2022, highlighting cyclical risk and sensitivity to demand and costs.

Balance Sheet

Leverage remains meaningful for an airline, with debt roughly around equity in 2025 (debt-to-equity ~1.0) and above that level in several prior years. A positive is improving balance sheet positioning versus 2024 (lower debt-to-equity) alongside solid profitability on equity in 2023–2025 (~16–19%). Still, the capital structure is relatively debt-heavy, which can limit flexibility during downturns.

Cash Flow

Cash generation is solid in the most recent years, with positive operating cash flow and healthy free cash flow in 2023–2025, and free cash flow growth rebounding strongly in 2025 after a slight decline in 2024. Free cash flow covers a meaningful portion of earnings (roughly ~60–74% in 2023–2025), supporting quality of profits. The key weakness is cash flow volatility through the cycle, including negative operating and free cash flow in 2020 and lower operating cash flow relative to debt levels (coverage well below 1x).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	116.57B	104.37B	94.48B	51.04B	45.59B
Gross Profit	20.46B	32.58B	20.70B	20.41B	3.17B
EBITDA	26.13B	21.45B	27.14B	10.24B	6.38B
Net Income	10.81B	9.89B	9.79B	-6.62B	-5.53B
Balance Sheet
Total Assets	177.03B	171.24B	174.12B	180.91B	196.63B
Cash, Cash Equivalents and Short-Term Investments	12.29B	10.53B	15.53B	18.28B	19.28B
Total Debt	59.10B	68.47B	68.29B	77.11B	89.85B
Total Liabilities	116.92B	118.74B	114.08B	117.03B	124.38B
Stockholders Equity	60.10B	52.50B	60.03B	63.88B	72.24B
Cash Flow
Free Cash Flow	15.90B	14.33B	19.61B	14.11B	6.56B
Operating Cash Flow	25.71B	23.54B	26.41B	17.84B	8.84B
Investing Cash Flow	-7.81B	-6.08B	-2.67B	-2.76B	493.00M
Financing Cash Flow	-15.43B	-19.83B	-23.18B	-16.24B	-6.93B

Cathay Pacific Airways Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.55
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPCAY, the sentiment is Neutral. The current price of 7.55 is below the 20-day moving average (MA) of 8.29, below the 50-day MA of 8.15, and above the 200-day MA of 7.39, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 40.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CPCAY.

Cathay Pacific Airways Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTM	77 Outperform	$13.41B	10.91	136.60%	3.50%	6.81%	58.22%
CPCAY	74 Outperform	$10.86B	7.47	19.38%	5.05%	8.95%	17.01%
RYAAY	73 Outperform	$30.36B	269.96	27.85%	1.37%	14.75%	71.73%
UAL	71 Outperform	$29.92B	10.91	24.13%	―	4.24%	20.29%
DAL	69 Neutral	$41.68B	8.99	27.63%	0.96%	4.33%	-1.58%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AAL	45 Neutral	$7.13B	25.57	-2.76%	―	1.27%	118.64%