We downgrade VJC to OUTPERFORM from BUY following the recent rally in the stock price. We increase our target price 40.6%, reflecting: (1) improving passenger yields, (2) improving RPK spread, (3) lower WACC and (4) higher peer multiples. We forecast 2018 revenue and NPAT to grow 32.9% and 13.8%, respectively, with core NPAT expected to grow 53.9% due to VJC’s continued aggressive international route expansion.