GOL Linhas Aereas Inteligentes S.A.'s (GOL) preferred stock has appreciated 25% since our last update report dated 11 May 2009, reflecting market reaction to news of improving domestic demand and the stronger Brazilian real. However, despite the positive impact of the stronger real, given the weaker-than-expected 1Q 09 operating performance and higher oil prices, as well as the general bleak aviation industry outlook, we reiterate the GOL preferred stock a SELL....

We expect a y-o-y decline in top-line in FY 2009, reflecting reduced passenger traffic due to the continuation of the economic slowdown over our investment horizon. GOL derives a majority of its business from Brazilian domestic air traffic which is closely linked to economic growth in Brazil. In April 2009, the IMF forecast Brazil’s GDP to decline 1.3% y-o-y in 2009, which is expected to significantly impact air travel demand in Brazil....

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GOL Linhas Aereas Inteligentes S.A (GOL) preferred stock has appreciated 20.1% since our last update report dated 02 January 2008 reflecting investor sentiment to a drop in oil prices over the same period as well as higher than expected December traffic data. However, as we are likely to lower our estimates and target price in our next FY 2008 update report to account for the impact of global economic…