It was a “decent” result from Alliance Aviation, the broker suggests, reflecting the benefits of an expanded asset base, a better operating environment, and typically solid execution. The broker sees tailwinds ahead in further contract rollovers and asset expansion and the development of FIFO and Wet Lease opportunities.
However, with the ACCC hinting a full takeover by Qantas ((QAN)) would not be approved, the question now is what will Qantas do with its minority stake?
This overhang keeps the broker on Neutral. Target falls to $2.60 from $2.75.
Target price is $2.60.Current Price is $2.73. Difference: ($0.13) – (brackets indicate current price is over target). If AQZ meets the Credit Suisse target it will return approximately -5% (excluding dividends, fees and charges – negative figures indicate an expected loss).