KUALA LUMPUR (March 30): Shares of AirAsia X Bhd rose 2.2% late morning today after MIDF Research upgraded the stock to “Buy” (from Neutral) with a revised target price of 40 sen (from 57 sen), saying the operating environment of the aviation industry looked more favourable for AAX.

At 11.30am, AAX (Fundamental: 0.00; Valuation: 0.30) rose one sen to 46.5 sen with 2.9 million shares done.

In a note today, MIDF Research said the favourable environment should improve chances of AAX’s turnaround success.

It was further encouraged by management’s turnaround plans which addressed the weaknesses in its previous business model.

“We believe AAX’s share price has found its bottom.

“Hence upgrade AAX to Buy with ex-rights target price of 49 sen based on a justified P/B of 1.3x.

“Our fair value implies and FY16 PER of 14.8x and EV/EBITDA of 6.6x,” it said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)