logo
  Join        Login             Stock Quote

Chorus Aviation Downgraded To 'Sector Performer' By CIBC On Valuation

 January 08, 2013 01:26 PM


(By Balaseshan) CIBC World Markets Inc. analyst Kevin Chiang downgraded rating of Chorus Aviation Inc. (TSE: CHR.B) to "Sector Performer" from "Sector Outperformer" due to valuation with its share price up 37% since mid-November.

The brokerage, which lifted price target to $4.25 from $4, maintained its 2013 EBITDA estimate of $175.80 million and its 2014 estimate of $170.10 million.

While risk related to a dividend cut has been diminished, and a resolution to the Air Canada(TSE: AC.B) arbitration will be a positive catalyst, Chiang believes much of this is reflected already.

Even if AC.B "wins" on the outstanding issues remaining with regards to the arbitration resulting in the Controllable Markup falling to 11.41% (from 12.5% currently), the analyst could see CHR.B maintain its dividend as he is forecasting a 2013 payout ratio below 70%.

[Related -Genuine Parts Co. (GPC): This Company's Raised Dividends For 59 Years]

Once the arbitration is concluded, Chiang expects CHR.B will refocus on its diversification initiative. Areas that CHR.B can build on include partnering with another airline and leveraging its experience flying the 757 as well as more charter flying.

The analyst raised price target as he rolls out his 2014 EBITDA estimate and take his multiple up to 4.5 times (up 0.5 points to account for the reduced risk of a dividend cut). He assumes CHR.B's controllable mark-up is unchanged at 12.5% and with 2014 block hours flat year-over-year.

CHR.B remains unchanged from previous close of $4.11.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageGenuine Parts Co. (GPC): This Company's Raised Dividends For 59 Years

There are 253 million cars and trucks driving along U.S. roads. And the average age of those automobiles is read on...

article imageMicrosoft Bear Rolls Put Position

Microsoft options (MSFT) traded on above average volume by lunchtime Wednesday as shares fell more than the read on...

article imageAn Unexpected Drop For Jobless Claims

New filings for unemployment declined last week, the Labor Department reports, delivering a bullish read on...

article imageMedia Stock Screams Value In Spite Of Cord-Cutters

"Cord-cutter" has become the new buzzword. From Sony (NYSE: SNE) to Apple (NASDAQ: AAPL), major read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center

Related Articles:

An Unexpected Drop For Jobless Claims
More Articles on: Aerospace , Americas



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.