KUALA LUMPUR (July 17): CIMB Investment Bank Bhd upgraded AirAsia Bhd shares to "add" from "hold" after the stock's recent drop and in anticipation that the budget airline will report better financials in the second quarter ended June 30, 2017 (2QFY17).

CIMB analyst Raymond Yap wrote in a note today that the research house however maintained its AirAsia share target price at RM3.51.

"Upgrading AirAsia after recent share price correction," Yap said.

"On a yoy (year-on-year) basis, we believe that AirAsia may deliver better results in 2QFY17F despite the ringgit being weaker by 5.7% yoy and the jet fuel price (inclusive of hedging) higher by 11% yoy. This is because we expect loads to be 4% pts higher yoy, offsetting most or all of the cost hikes." he said.

At 3:43pm today, AirAsia shares rose seven sen or 2.28% to RM3.14 for a market capitalisation of RM10.49 billion. The stock saw some six million shares changing hands.

AirAsia is scheduled to announce its 2QFY17 financials next month.