Pegasus Hava Tasimaciligi AS slumped the most in 11 weeks as Ekspres Invest said a rally since the stock started trading in April was overdone, prompting the broker to downgrade the low-cost Turkish carrier to hold.
Pegasus fell 5.8 percent, the steepest drop since June 6, to 29.5 liras at the close in Istanbul. More than 2.4 million shares changed hands, on par with the stock’s three-month daily average, according to data compiled by Bloomberg. The Borsa Istanbul National 100 index lost 0.3 percent, falling to the lowest close since July 11.
Pegasus, which offers flights to 71 destinations in Turkey and abroad, soared 60 percent since its trading debut on April 26, data compiled by Bloomberg show. That compares with a drop of 15 percent for the benchmark gauge in the period. Ekspres lowered the stock to market perform, or the equivalent of hold, from outperform, in an e-mailed note dated today.
“Profit-taking is only logical when we’re talking about a stock that has performed so well,” Selim Kunter, an Istanbul-based analyst at Ekspres, said by phone.
Ekspres raised its price estimate on the shares to 34 liras from 31.5 liras after Pegasus said yesterday second-quarter profit climbed 49 percent to 53.3 million liras ($27 million). That beat Kunter’s estimate of 51 million liras, according to data compiled by Bloomberg.
Shares of Turkey’s second-biggest publicly traded carrier are valued at 10.6 times estimated 12-month earnings, the data show. That compares with 8.3 times for Istanbul-based Turkish Airlines and 12.5 times for Air Arabia PJSC, whose hub is in the emirate of Sharjah, United Arab Emirates.