Virgin Australia's (ASX:VGN) fiscal 2026 result was solid considering the operating environment and higher fuel costs, Jarden said in a Friday note.

The airline's balance sheet remains leveraged less than target, leaving room for a maiden dividend announcement, which was a quality surprise.

Its fiscal 2027 first half earnings before interest and taxes (EBIT) guidance is solid relative to expectations and fiscal 2027 total capital expenditure guidance is within expectations.

The airline's fiscal 2027 first half underlying EBIT is expected to be in line with the prior corresponding period result at AU$490 million. Consensus estimates are for AU$470 million, while Jarden forecasts underlying EBIT of AU$467 million.

The brokerage assigned Virgin Australia a buy rating with a AU$3.15 per share price target.