Analysts at Canaccord Genuity reiterated their ‘buy’ rating and 120.0p target price on aviation firm Air Partner on Monday , stating recent solid trading had set the firm’s balance sheet up with “firepower for growth”.
Canaccord Genuity said Air Partner’s freight charter unit had delivered stronger-than-expected trading, leading to full-year 2022 pre-tax profit, net cash and earnings per share upgrades.
As Air Partner delivers on its strategy, the Canadian bank thinks this will allow investors to assign a greater probability of compounding growth prospects. Critically, even though stronger trading has a 2021-22 effect only, Canaccord thinks the cash generated opens the way to accelerate growth and shareholder returns and that, as a result, longer-term the shares could then surpass 240.0p as the PER re-rates upwards.
“We project unchanged 2023E EPS 37% > FY20 EPS (pre-COVID-19) despite ~20% dilution from new shares issued since – with quality EPS from FCF (av. ~11% FCF yield FY22E-24E) and RoE over 20%,” said the analysts.
“With a PER ~10x FY23E (and ~3% DPS), we estimate this asset-light, diversifying company offers scope for good total return prospects.”
In a flash note on Monday, analysts at Berenberg noted that Kistos had confirmed press reports published late last week that it was participating in a process through which TotalEnergies hopes to sell interests in certain of its West of Shetland assets.
Berenberg stated that the reports indicated the discussions were related to 20% of Total’s interest in the Laggan-Tormore gas fields and, while the company has not been selected as preferred bidder and there was no certainty that discussions will lead to a definitive transaction, if the talks were to be successful, any deal was expected to be completed from existing resources.
The German bank, which has a ‘buy’ rating and 495.0p target price on the stock, also highlighted that Kistos’ stated strategy was to grow by acquisition, and therefore its participation in potential sales processes was not a surprise.
“Clarity on the terms are clearly needed to take a view on valuation, but we note management’s strong track record of completing deals on attractive terms that are accretive to NAV. Kistos is currently trading on FY22/24 EV/DACF of 4.9x/1.4x, EV/EBITDA of 4.0x/1.2x, an FCF yield of (5%)/45% and at a 20% discount to our price target,” said the analysts.
