AIR - Air NZ.

**tim23** · 25-08-2015, 02:47 PM

Well done couta can't wait for result betting on bumper divvy and special

**Beagle** · 25-08-2015, 03:12 PM

Originally Posted by couta1

Exactly will probably hit $2.90-$3 within a fortnight I reckon so why sell? Disc-Bought more on open

You're a laugh a minute mate...I hope you're right but realistically in this market ???

**couta1** · 25-08-2015, 03:24 PM

Originally Posted by Roger

You're a laugh a minute mate...I hope you're right but realistically in this market ???

Okay Roger lets have your figure then!!

**tim23** · 25-08-2015, 03:27 PM

He bought them at open so under $2,60 the divided yield will be attractive we can assume hes not buying them to sell next week!

**Beagle** · 25-08-2015, 04:29 PM

Originally Posted by couta1

Okay Roger lets have your figure then!!

As I said before mate the company very recently guided to $520-$530m profit before tax and before the contribution from VAH which will be a negative number this year. Seeing as this guidance was so recent and in such a tight range I'd be surprised if it was at much of a variation to what they said recently. The consensus EPS this year is about 30cps and for FY16 about 41 cps. Apply whatever PE you think is appropriate. If one takes the argument that they can earn 30 cps without the oil price tailwind at present, i.e. strip out the FY16 oil price tailwind of circa 11 cps then if we use the ten year average PE of 10 we get fair value of $3.00. I think that slightly undervalues the company, (my fair value is $3.30), but its not going to go roaring up to $3.00 later this week when the result has already been telegraphed into such a tight range. As I mentioned yesterday one of the key concerns is customers propensity in the current environment to commit to major travel expenditure, (forward consumer sentiment is at a low since the GFC) so this isn't the ideal environment into which the company is building capacity at 6% growth year on year. Clearly there is execution risk in their current growth strategy in these challenging times. The stock is undervalued but we live in interesting times so expectations of a rapid rise in altitude are probably unrealistic.

**couta1** · 25-08-2015, 06:12 PM

Thanks for your reply Roger, the amount of rise will IMO depend on the divvy amount and any special plus forward guidance on the same for next year as well as forward earnings guidance which goes without saying. I'm gonna stick with my price range though so lets see.

**Beagle** · 25-08-2015, 06:26 PM

Agreed mate its all about forward guidance now as the current year's result has all but been telegraphed already. Its a superbly managed company, there's no question about that and I have a lot of confidence they can navigate their way through any challanges they might encounter. Lately we've seen some innovative new marketing, (e.g. the Friday sunrise campaign), and inbound tourism is up 7% year on year and will grow with our weaker currency now its more reasonably priced to come to N.Z. again. That and they have a modern fuel efficient fleet and are prepared to make hard calls on inefficient aspects of their operation, (pending withdrawal of Beech 1900D's is an example of that), and oil is nearly as cheap as water, (cheaper than bottled water lol), so fingers crossed for a good result and onward and upward.

**sb9** · 25-08-2015, 08:17 PM

Think I share Roger's view on this one. I suspect the $3 mark quite far away now, unless something dramatic eventuates. Another 12 hours or so, all will be revealed.