Did some quick calcs. on the closing price of $3.04.
Using a cost of capital of 5.8% earnings per share works out to about 18 cents per share (29 cents last year and 21 cents in the first six months) and a market expectation of earnings at about 281m for the year(428m last year and 352m half year). In short the market has put an expectation that QAN will show a loss of 71m in the later half. What is interesting is that at $3.20 the market had an expectation of 19 cents per share and 60 million shares were traded over that one cent per share. PE of about 16.8.
Last year's revenue was $11.3bn and based on these calcs. market expects revenues around $7.5bn or a decline of about 34%. Consider that the half yearly report had a revenue of $5.8bn this means that the company is expected to earn $1.7bn in the later half (or about 29% of the first half).
If this scenario is right then the primary issue for Mr. Dixon and his team will be to come up with a short to medium fix to manage the expenses and idle planes. He will need to keep expenses down to about $6.4bn (last year $10.6bn.) or a decline of about 39%. Need to consider that first half expenses were $5.4bn and that means he will need to get expenses down to about $.9bn - a tall order in the short term. Unfortunately, the staff will be severly hit.
SARS hit in sometime in March and that is about 3 months into the half year and after the holiday season. The company will have to manage a difficult situation for the last four months.
Based on this argument I think that the EPS will be higher than the expected 0.18 cents. Frankly, I think that the issue is serious but I also think that the market has over reacted and I suspect that hedge funds made a killing on the way down and they will also jump in on the way up.
I bought at $3.05.
This is only my opinion.
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Last
$5.45 |
Change
0.040(0.74%) |
Mkt cap ! $9.398B |
Open | High | Low | Value | Volume |
$5.42 | $5.50 | $5.37 | $50.67M | 9.312M |
Buyers (Bids)
No. | Vol. | Price($) |
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8 | 264276 | $5.44 |
Sellers (Offers)
Price($) | Vol. | No. |
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$5.46 | 41289 | 3 |
View Market Depth
No. | Vol. | Price($) |
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5 | 115028 | 5.440 |
4 | 60037 | 5.430 |
3 | 6114 | 5.420 |
2 | 7395 | 5.410 |
4 | 8933 | 5.400 |
Price($) | Vol. | No. |
---|---|---|
5.460 | 20780 | 2 |
5.470 | 35197 | 3 |
5.480 | 32922 | 3 |
5.490 | 20145 | 2 |
5.500 | 117894 | 53 |
Last trade - 16.10pm 28/03/2024 (20 minute delay) ? |
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Last
$5.48 |
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Change
0.040 ( 1.54 %) |
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Open | High | Low | Volume | ||
$5.41 | $5.50 | $5.37 | 3771694 | ||
Last updated 15.59pm 28/03/2024 ? |
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