Ann: Acquisition of Additional 16 Embraer E190 Aircraft, page-11

Got this in an email today ...Mon, 21 Dec at 9:23 am

Excerpts From Today's Broker Call

Monday, 21 December 2020

AQZ - ALLIANCE AVIATION SERVICES LIMITED

Morgans rates AQZ as Add (1) - Alliance Aviation will acquire a further 16 Embraer E190 aircraft for $85m, expanding the company’s fleet to 73 aircraft (from 57), once fully deployed in FY23. Morgans calculates the acquisition has been completed at an attractive earnings (EBITDA) multiple.

The broker believes the extent of the fleet expansion provides a strong indication of the company’s planned activity levels across its network over the next two to three years.

Given a strong track record, Morgans expects plans are well advanced in progressing opportunities to utilise the new capacity.

The Add rating is maintained and the target price is increased to $5 from $4.40.

Target price is $5.00 Current Price is $4.03 Difference: $0.97 If AQZ meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges). Current consensus price target is $4.55, suggesting upside of 12.9%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 6.00 cents and EPS of 20.00 cents . At the last closing share price the estimated dividend yield is 1.49%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.15. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.4, implying annual growth of 1.5%. Current consensus DPS estimate is 10.4, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 18.8.

Forecast for FY22:

Morgans forecasts a full year FY22 dividend of 12.00 cents and EPS of 25.00 cents . At the last closing share price the estimated dividend yield is 2.98%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.12. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.6, implying annual growth of 19.6%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 15.7.

Market Sentiment: 1.0All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources