AIR - Air NZ.

[winner69]

Anything could happen with the nutters we've got in charge of certain countries mate, I've never been shy of taking a punt ,so all good.

Maybe the chart with its beautiful symmetry is forecasting such doom ahead

God sends messages in funny ways.

[Beagle]

I think BP is drawing a very long bow calling that a head and shoulders. Classic head and shoulders a while back in 2016 as can be clearly seen from the long term chart.
SP still in a clear uptrend and well above 100 day MA which is approx. $2.95. C.L. to deliver the goods on 23 August and some people who are well positioned will be head over heels, including toes, knees and shoulders

[Hoop]

I guess the pattern looks a bit messy - but is it just me seeing a head and shoulders pattern emerging?

Yes it is just you BP...You know there are pills available for that...

But joking aside there is TA breakdown weakness atm. How long this will last who knows..We do know some medium term investors bail when their stops are triggered below the second support (3.30) and this could be the reason of the gap down last Friday.

After a 50% gain (not counting the Divy) in 4 months, a big breather (profit -taking) event should be expected ....eh.

Wait for buy signals..(turning of the tide)

Disc: have none

[see weed]

Can I release my seatbelt yet? Has the tide turned? Nice little gain for those who got some at 3.10c the other day.

[Beagle]

Can I release my seatbelt yet? Has the tide turned?

I'm expecting the captain to turn off the seat belt sign and announce clear flying conditions next Wednesday and shortly after that the lovely staff will be around to serve you with a lavish helping of refreshments The beauty of AIR is they are such prompt payers of their dividends so soon after the announcement, coincidence with N.Z. Govt being the major shareholder or not ?, you folks be the judge.

[Meextr]

I'm expecting the captain to turn off the seat belt sign and announce clear flying conditions next Wednesday and shortly after that the lovely staff will be around to serve you with a lavish helping of refreshments The beauty of AIR is they are such prompt payers of their dividends so soon after the announcement, coincidence with N.Z. Govt being the major shareholder or not ?, you folks be the judge.

Will the refreshments be champagne?

[Beagle]

Will the refreshments be champagne?

I'm expecting a steady 10 cps final dividend fully imputed as usual but you never know it could be a little higher, but I doubt it. They're trading reasonably close to the top of their fairly conservative, (for this capex intensive industry) self imposed debt ratio of 55%, (were slightly above it at the half year). The really huge specials will come in the FY20 - FY23 period when they ostensibly have a hiatus from capex. In the meantime they're coming toward the end of a fleet replacement program and are well positioned going forward with a very young fuel efficient fleet, excellent management and trading on undemanding fundamental's.
Disc: Holding long term for strong dividend yield.

[value_investor]

AIR is a well run company so I'm assuming that any extra profitability made above expectations will be made towards bringing that gearing down so the safe-haven. AIR imposed 45-55% and went outside their range from memory to 56%. That does bring up financing costs long term so I would expect it to go to gearing.

In saying that, anything above 525m would be a massive bonus considering the number of new players in the market which I expect to quieten down in the next FY and beyond.Also, there are still a number of planes to be delivered in the next three financial years which will improve operational efficiency. Nothings really guaranteed in this airline game though now is it.

[Beagle]

With the result less than a week away I have had a good look at my model this morning. As I have stated previously I think the original guidance given of $475-$525m subsequently revised to likely to exceed $525m seems very conservative given their first half profit before tax of $349m. We know that $349m in the first half included a gain of $22m on the sale of their remaining stake in Virgin so normalized their first half was $327m before tax and this against a background of ten new airline / routes being flown and an extended period when new entrants ran opening specials at unsustainable yields which significantly compromised AIR's average yield in the first half.
Second half yields have been materially stronger.

My revised forecast for the full year is $635 - $680m based on all known inputs I follow and I think their guidance all along has been extremely conservative.
At the mid point excluding the $22m Virgin gain that's $636.5m less tax at 28% = $457.5m = 40.7 cps. Apply whatever PE you like but I think the current market implied PE is a little light and I think they are set to deliver a result next Wednesday that significantly exceeds average analyst expectations, ($517m before tax average on 4traders). We will see who is wrong and who is right next week but I am happy to back my own analysis which is quite considerably different to the average analyst view.

Conclusion, I think the rally we have seen over recent months, (albeit ameliorated by the correction in recent weeks), is not overdone and the shares represent a very sound hold at the current level. Disc: I added a few more on the back of my revised forecast this morning.

Edit adding a bit of further detail to the above :-My analysis shows on average in the last three years second half profit represents 48.2% of full year profit. This year we know that second half yields have been materially stronger than first half and fuel costs have slightly undershot company expectations. On the face of it based on all known data I cannot find / see logical reasons why second half profit shouldn't match first half or at the very least go very very close which if matched would give a result of $680m inclusive of the $22m profit on Virgin sale. Their offical forecast hasn't made sense to me for many months now. Something in the low $700m's is not completely out of the question in my opinion. Maybe I am too optimistic / been affected by aviation fuel fumes LOL, we'll see next week.

A reminder that this is the so called "competition" AIR are up against in the regions https://www.stuff.co.nz/travel/trave...called-in-sick Any wonder Jetstar trimmed back their flight schedules over winter due to lack of customer demand ?

[stoploss]

Beagle , don't they have to do a profit upgrade / downgrade to the NZX if they are going to over/under deliver on Directors forecasts by more than 10 % , not sure of the amounts ... however if they were going to hit the top end here maybe an upgrade was warranted ?
DISC : Holding