The interim result was solid, in Credit Suisse’s view, although an accelerated maintenance schedule prevented a meaningful improvement.
Nevertheless, the outlook for the second half appears particularly strong, with an estimated 5% more active capacity, a tight resources market and a larger contribution from recently re-priced contracts.
Yet, Credit Suisse assesses the devil is in the detail around cash flow, with a slower-than-expected ramp up of assets that were added to the business in the first half and an accelerated maintenance program meaning more downtime.
Outperform rating maintained. Target rises to $3.15 from $2.90.
Sector: Transportation.
Target price is $3.15.Current Price is $2.52. Difference: $0.63 – (brackets indicate current price is over target). If AQZ meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).
