FY19 results were weaker than expected. Credit Suisse notes the aggressive initiatives to cut costs amid reviews of fleet capacity and network.
While the initiatives are likely to deliver a sustainable improvement, the broker suggests this may take 2-3 years.
Credit Suisse believes the new CEO is taking the right action and downgrades to Underperform from Neutral on valuation grounds. Target is reduced to $0.10 from $0.18.
Target price is $0.10.Current Price is $0.16. Difference: ($0.06) – (brackets indicate current price is over target). If VAH meets the Credit Suisse target it will return approximately -60% (excluding dividends, fees and charges – negative figures indicate an expected loss).