Friday, 7 August 2020AQZ - ALLIANCEAVIATION SERVICES LIMITED...

Friday, 7 August 2020

AQZ - ALLIANCEAVIATION SERVICES LIMITED

Morgans rates AQZ as Add (1) - Alliance Aviation Services posteda FY20 profit (NPBT) figure of $40.7m that was in-line with recent guidance andconsensus. Morgans points to extremely strong trends in 2H20 for aircraftutilisation and company outlook comments for earnings growth in FY21 that wereabove the broker’s expectations.

Accordingly, Morgans upgrades NPBT estimates by 9.1%, 4.5% and11.5% for FY21, FY22 and FY23, respectively.

The company’s outlook comments identified key opportunitiesincluding the conversion of short-term contracts to long-term chartercontracts, an expected sustained increase in flight schedules for a number ofclients to pre-covid-19 levels and the gradual recovery in Revenue PerTransaction (RPT) revenues and benefit of new routes launched.

Morgans sees progress on resuming Virgin wet lease services asthe near-term catalyst for the stock.

The rating of Add is maintained. the target price is increasedto $4.00 from $3.65.

Target price is $4.00 Current Price is $3.60 Difference: $0.4 IfAQZ meets the Morgans target it will return approximately 11% (excludingdividends, fees and charges). Current consensus price target is $3.92,suggesting upside of 8.8%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY21:

Morgans forecasts a full year FY21 dividend of 11.00 cents andEPS of 18.00 cents .At the last closing share price the estimated dividendyield is 3.06%. At the last closing share price the stock's estimated Price toEarnings Ratio (PER) is 20.00. How do these forecasts compare to marketconsensus projections?

Current consensus EPS estimate is 17.9, implying annual growthof N/A.Current consensus DPS estimate is 12.5, implying a prospective dividendyield of 3.5%.Current consensus EPS estimate suggests the PER is 20.1.Forecastfor FY22:

Morgans forecasts a full year FY22 dividend of 14.00 cents andEPS of 23.00 cents .At the last closing share price the estimated dividendyield is 3.89%. At the last closing share price the stock's estimated Price toEarnings Ratio (PER) is 15.65. How do these forecasts compare to marketconsensus projections?

Current consensus EPS estimate is 22.8, implying annual growthof 27.4%.Current consensus DPS estimate is 12.8, implying a prospectivedividend yield of 3.6%.Current consensus EPS estimate suggests the PER is15.8.Market Sentiment: 1.0All consensus data are updated until yesterday.FNArena's consensus calculations require a minimum of three sources