Morningstar says Virgin Australia’s long-awaited float will be overpriced, and its private equity owners are taking advantage of high travel demand.

In the first analyst note circulated to clients before the airline’s listing on June 24, Morningstar’s Angus Hewitt placed a $2.60-a-share value on the company’s stock. Virgin has secured an IPO at $2.90-a-share, raising $685 million in an offer that has seen heavy demand from investors.