There has been a welcome recovery in shares of ailing carrier Norwegian, from near 30 NOK to over 45 NOK. The bulk of the rally was based on a “too big to fail” / M&A routine, for the debt ridden group.
Indeed, it wax surprising that the stock price hardly blinked when IAG walked away from the table last week. Clearly, there have been hopes that another party might step up to the plate.
However, the stock is currently priced with a takeover premium. If, as seems likely, Norwegian has to fly solo with no other bidders visible from the flight deck, there would appear to be an over valuation at current levels.
A return to the recent chart gap sub 40 NOK may be anticipated at the very least. It would be surprising if the old February floor at 47.73 NOK is cleared near term.