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Friday, March 7, 2014

Maybank IB downgrades aviation, AirAsia, AirAsia X still Buys (extr.Star)

Maybank IB Research is downgrading the outlook on the aviation sector to Neutral from Overweight, but is maintaining its Buy call for AirAsia and AirAsia X, while recommending a Sell on MAHB.

Surprisingly, perhaps, the research house is upgrading MAS to Hold from Sell.

According to the research house, AirAsia fought a tough battle in 2013 and has proven that it can hold its ground better than its competitors.

“When the operating environment starts to improve, which we think it will in 2014, AirAsia is best positioned to take advantage of this,” it said, maintain the BUY call but lowering the target price to RM2.65 from RM2.80.

AAX also retains the Buy call with a lower target price of RM1.06 from RM1.20.

“AAX’s FY13 results unnerved the market and the stock is now trading at a 34% discount to its IPO price of RM1.25. We acknowledge that 2013 was a disappointment, but the basis of investing in AAX was always premised on 2014’s earnings. We think the market has overreacted and over-punished the stock, which is now trading at deep value territory....

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