"S&P Analyst Research Notes
S&P REITERATES HOLD OPINION ON SHARES OF EXPRESSJET HOLDINGS
Monday 03/10/2008 10:53 AM ET
XJT posts Q4 operating loss of $0.52 vs. EPS of $0.40, wider than our $0.25 loss estimate. We do not think XJT's independent branded flying will ultimately be successful, due to what we see as the difficult economics of operating a 50-seat fleet. We also think there is a risk that Continental (CAL 23****) could return more planes to XJT, and CAL could pressure contract rates. But we think XJT's share price discounts much of these risks. We are cutting our 12-month target price to $2.50 from $3.50, an enterprise value-to-EBITDA multiple of 4X our '08 EBITDA estimate, below peers."
I agree with them for the most part. I however think "tis the season" for a buyout. Between Ch. 11 or buyout im willing to bet a buyout will take place. Their business plan of doing independent charter flying in the midst of a POSSIBLE economic recession, on top of rising fuel prices, and even a slightly decreasing value of the dollar, has hurt their financial books. Especially on the branded side, I however think their contracts with Delta and CAL should suffice for their survival, but their branded is hurting them.
A buyout will be good for shareholders, depending on premium or acquiring firm. But for the employees who knows, possible cutbacks may occur.
http://www.sbsun.com/ci_8534691?source=most_emailed (More cut flights from branded)
I forsee more drop in value on common shares, and then perhaps a buyout or merger news will boost it.