KUALA LUMPUR: Maybank IB Research has upgraded AirAsia Bhd to ‘buy’ from ‘hold’ with a target price of RM2.65 despite the airline’s
weakening shares recently.
In a note today, the research house said it has also kept its earnings forecasts and target price of the airline unchanged.
“We believe the first quarter 2014’s (Q1 2014) weakness has been priced in and values have emerged.
“Our target price represents an attractive 18 per cent upside,” it said.
The research house said it looked at AirAsia’s outlook beyond first quarter of this year, with tourist arrival numbers and air traffic growth back to positive growth territory.
AirAsia’s decision to taper capacity growth would help boost yields and load factors, whereby these factors and combined with the current low jet fuel price will swell FY15’s profits significantly, it said.
Maybank IB Research projected AirAsia’s earnings before interest, taxes, depreciation, amortisation and rent to increase to RM1.77 billion from RM1.70 billion in the previous financial year.
The research house said Q12015 was bad with low load factors and soft yields. -Bernama