Following a weaker than predicted first half performance Credit Suisse has reduced its full year profit forecast for Alliance Aviation Services -22%, noting impacts on the operational cost base are likely to persist into the second half.
First half earnings of $40m compared to the broker’s forecast $53m, with the miss largely driven by covid volatility in flying demand. One-off expenses related to the E190 fleet expansion added to the half’s profit loss, deployment is delayed three months.
More positively Credit Suisse expects upside risk does exist from FY23, notably from the fleet expansion. Expect a weaker share price following first half update, an attractive opportunity for investors.
The Outperform rating is retained and the target price decreases to $4.80 from $5.30.
Sector: Transportation.
Target price is $4.80.Current Price is $3.97. Difference: $0.83 – (brackets indicate current price is over target). If AQZ meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
