Daily Brief Industrials: Okuma Corp, Gol Linhas Aereas Intel-Adr, easyJet PLC, Wizz Air Holdings, Frontier Group Holdings, Trimas Corp, GlobalData and more

• Okuma Corp (6103 JP) is flagged as a good candidate to boost its shareholder value, it has a net cash balance sheet, P/BV of 0.9x and low PE of 10.7x  
• Management has elaborated a detailed plan to boost its P/BV ratio, with targets to boost revenues and profit margins, as well as a 35% dedicated payout for dividends 
• Okuma should trade at least 1x Book given its strong business positioning and brand name; we derive a fair value of JPY7,300 (11% UPSIDE) using FY2024’s forecast book value 

• GOL has filed for CH11 in a New York court and will look to restructure, as major competitors/peers LATAM Group, Avianca and Aeromexico did when COVID struck, disadvantaging GOL.
• To illustrate GOL’s disadvantage; in 9M23, GOL’s financing costs outweighed its EBITDAR to drive a negative PBT, whereas LATAM’s PBT represented 29% of EBITDAR, despite lower EBITDAR margins of 22%. 
• Based on recent precedents, we expect the process may take two years.

• EasyJet reported a strong 1Q24 (to December 2023) result, outperforming expectations, while issuing positive guidance on pricing prospects for the rest of winter and summer.
• Pricing for the rest of winter appears benign, but easyJet highlights summer pricing is “well ahead yoy”, calming concerns that pricing strength will roll over.
• Winter losses remain very difficult to manage, with easyJet likely to see a £3-4 per seat drag on pre-pandemic winter EBITDAR generation. Future opportunity and risk.

• Wizz Air held guidance for FY24 to March 2024, or net income of €350m-€400m, but only due to compensation from Pratt & Whitney.
• With no capacity growth in FY25 to March 2025, and costs apparently under control, Wizz Air should be able to drive significant earnings improvements.
• Wizz Air seems set to receive over €200m in P&W compensation for aircraft groundings in 4Q24 to March; read across for other airlines operating grounded GTFs.

• Coverage launch on Frontier Airlines, JetBlue and Spirit Airlines following the rejection of the JetBlue/Spirit deal by the US.
• High leverage and above-sector cost inflation put each carrier in a difficult competitive position, driving the need for significant structural earnings improvements to achieve financial sustainability
• We are 10% above consensus 2024 EBITDAR for Frontier, narrowly above for JetBlue but 17% below consensus for Spirit.

• The industry headwinds TriMas Corp. (TRS) experienced in 2023 are showing signs of abating and should result in TRS growing earnings in 2024
• TRS spent 2023 restructuring its packaging business after customers began to change their ordering habits in 2022.
• Recent quarterly results from Proctor & Gamble (PG) and preliminary sales from Inter Parfums (IPAR) shed positive light on unit volume growth in consumer packaging

Having completed its five-year growth plan a year ahead of schedule, despite the intervening pandemic, GlobalData has now set out its ambitions for the next three years. These build on the group’s strengths in platform and proprietary data across its three segments in healthcare (36% of FY23e revenue), consumer (36%) and tech (28%). M&A is a key element, with the group’s financial strength significantly bolstered by the deal with Inflexion in December, where Inflexion took a 40% stake in GlobalData’s healthcare business at an implied valuation equivalent to c 75% of the group’s then market capitalisation. The share price has yet to reflect the benefits of this deal or the value inherent in the rest of the GlobalData.