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.”
