KUALA LUMPUR (Nov 20): AllianceDBS Research has maintained its ‘Fully valued’ rating on AirAsia X (AAX) at 6.5 sen with a lower target price of 3 sen (from 4 sen) based on 0.05x price/sales which is equivalent to -2SD (standard deviation) of its 5-year mean.
In a note today, AllianceDBS said it still expects the upcoming quarters to remain challenging for AAX as international borders remain closed.
“Upcoming earnings are most likely to mimic 3QFY20 results if its fleet remains grounded.
“As such, the resumption of flights is essential for AAX’s recovery. The reopening of international borders could act as re-rating catalysts,” it said.
The research house said its forecasts assume reduction in volume for FY20/21F.
“However, if a recovery happens sooner than expected, AAX’s earnings could rebound faster,” it said.