Industry downturn making its mark. 1Q12 is expected to be severely
loss-making due to the impact of a 20% higher fuel price YoY and a weak
yield environment. The remainder of the 2012 looks equally grim and we
think MAS is struggling to get its turnaround strategy in place. We have
cut our earnings forecasts due to higher than budgeted fuel price and a
tougher yield environment. Downgrade to SELL, with a lower target price
of MYR1.00 from MYR1.55, pegged to 10.0x 2013 PER, which is the
mid-level valuation of the aviation cycle.
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Source: Maybank Research - 16 May 2012
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