ALLIANCE AVIATION SERVICES LIMITED (AQZ)
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14/02/2025

1

Add

$4.10

57.09%

With the ongoing expansion of the E190 fleet, Morgans notes Alliance Aviation Services reported a "solid" 1H25 earnings result, with revenue advancing 11.3% and net profit after tax rising 9.9%, exceeding the analyst's forecast of 7.3% growth.

Flight hours rose 14%, compared to a forecast decline of -2.7%, due to a lift in wet lease flight hours, the broker explains.

Due to a significant rise in depreciation/amortisation and net interest costs over FY26/FY27 as the company takes delivery of 13 E190 aircraft in the next year, Morgans lowers net profit before tax estimates by -6.5% for FY26 and -13.6% for FY27.

The broker's FY25 earnings forecast slips by -1.7%.

No change to the target price of $4.10 and Add rating. The company is viewed by Morgans as post peak leverage and capex, a positive.

FORECAST
Morgans forecasts a full year FY25 dividend of 0.00 cents and EPS of 40.00 cents.
Morgans forecasts a full year FY26 dividend of 0.00 cents and EPS of 45.00 cents.

17/02/2025

1

Overweight

$3.93

50.57%

Alliance Aviation Services delivered a mixed 1H25 result with continued impressive earnings growth but adjusted operating cash conversion remained below historic norms, Wilsons highlights.

The broker downgraded flight hours on a reduction in the average operating fleet by three in FY26 and six in FY27, reflecting potential efforts to optimise the fleet.

The analyst raised EBITDA forecasts, driven by a strong recent run rate in EBITDA per aircraft, partially offset by higher labour costs and a lower average operating fleet.

Target price cut to $3.93 from $4.32. Overweight maintained.

FORECAST
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 40.00 cents.
Wilsons forecasts a full year FY26 dividend of 6.80 cents and EPS of 42.40 cents.