Avation Share Discussion Threads

[cf456] 03/6/2024 11:01

Tipped today - 'Avation – Cheap And Now Ready To Fly Away'

[wsm812] 03/6/2024 10:52

I boarded this share this morning on the back of the FourSixThree selling completion, as noted by @Z1CO and for the exact reasoning that @donald pond explains.

[donald pond] 03/6/2024 10:09

Because the shares have been flat over the last week while someone has been selling in size. Now that selling is over, you would expect the rules of supply and demand to mean the price should rise, as a major source of the supply of shares has gone away

[geniechem] 03/6/2024 08:30

Why is this good news?Always keen to learn.

[z1co] 03/6/2024 06:46

Excellent news!

FourSixThree Capital LP (4.78%) have sold out completely.

[z1co] 02/6/2024 07:27

Really strong buying on Friday afternoon including a 24,000 BUY @ £1.43 reported after the close.

With two profit upgrades in May , both WH Ireland and Canccord Genuity have raised their earning estimates.

WH Ireland views the current share price discount to NAV as unjustified, given the substantial progress Avation has made in deleveraging its balance sheet and the broadly validated aircraft valuations in the market. Consequently, WH Ireland sees a fair value for Avation’s shares at 250p, suggesting significant upside potential from the current share price of 140p.

[z1co] 31/5/2024 12:36

There must be a seller that's holding these shares back and once the seller is finished the share price will take off.

Being quoted above the offer price of £1.43 for 5,000.

Quoted £1.4373

[cf456] 29/5/2024 15:20

A slight push higher on the chart and there is strong potential upside after the long consolidation.

[z1co] 29/5/2024 14:40

Intra day dip being bought back .... strong buying

[cf456] 29/5/2024 06:34

So WH Ireland, Canaccord and Simon Thompson all seeing significant upside in the share price from the current level then. All very positive.

“WH Ireland sees a fair value for Avation’s shares at 250p, suggesting significant upside potential from the current share price of 140p.”

“'Buy' is the rating with a target price of 280p with the shares trading ‘far below’ NAV.”

[z1co] 29/5/2024 06:25

Two profit upgrades in one week.

Simon Thompson of IC is recommending to his followers to BUY

WH Ireland have increased their price to £2.50.

Canccord Genuity have also increased their price target by 50p to £2.80.

[z1co] 28/5/2024 21:31

Canccord Genuity has also raised it's price target from £2.30 >>>> £2.80.



Avation in sweet spot as airlines battle for capacity, suggests broker

Published: 15:28 28 May 2024 BST

Avation PLC (LSE:AVAP), the commercial aircraft lessor, has been upgraded by Canccord Genuity following the sale of two ATRs, which has underlined the value of its fleet says the broker.

“Importantly, Avation now has a 'sold out' fleet and is poised for growth with lower CO2 ATRs - that may help mitigate future environmental regulatory risks the sector could face," adds the broker.

For this year, 2024, Avation is set for lease revenue expansion with an average lease term of 4.3 years and rapid deleverage helped by a 105% rent collection rate.

Based on its utilisation and order book Canaccord expects both profits and NAV to rise with a focus on lower carbon-emitting ATRs another potential long-term value kicker.

The potential refinancing of the 2026 bond debt is a likely catalyst for possibly lower perceived lending risk, while, more generally, supply constraints for new aircraft are pushing up prices either to buy or lease.

“For aircraft lessors, we forecast demand compounded by share gains as airlines are more reliant on leasing.”

'Buy' is the rating with a target price of 280p with the shares trading ‘far below’ NAV.

[z1co] 28/5/2024 21:26

Avation Plc: Capitalising on Aircraft Purchase Rights and Robust Lease Growth

May 28, 2024 2:10 pm

Avation PLC (LON:AVAP), has provided a trading update as of 24 May 2024, so DirectorsTalk Interviews caught up with WH Ireland Analysts John Cummins and Charlie Cullen for further insights.

Q1: What recent developments have positively impacted Avation’s financial outlook?

A1: Avation has reported significant positive developments, including an expected increase in the value of its ATR 72 purchase rights to approximately $115 million, up from $88 million at the end of 2023. This increase is due to the grant of new aircraft purchase rights and the extension of existing ones. Additionally, the company has seen an improvement in lease revenues and cash collections, benefiting from full fleet utilisation and a 19% year-over-year increase in international passenger air traffic reported by IATA.

Q2: How has Avation’s recent sale agreement affected its financial position?

A2: Avation has announced a sale agreement for two ATR 72 aircraft from its order book, which is expected to deliver $10 million of net cash proceeds at delivery in FY 2025E. This sale validates the substantial option value attached to Avation’s purchase rights and supports the company’s strategy of realising value through the sale or lease of aircraft.

Q3: What are the updated forecasts for Avation’s net asset value (NAV) and share price?

A3: Following the revaluation of purchase rights, WH Ireland has adjusted its forecasts, resulting in an implied 25% increase in NAV at the year-end. Consequently, the estimated fair value for Avation’s shares has been raised to 250p from 200p.

Q4: Can you explain the strategic significance of Avation’s ATR 72 purchase rights?

A4: Avation holds orders for 12 ATR 72 aircraft and 24 purchase rights, which allow the company to purchase new aircraft at a significant discount to their market value. These rights hold substantial option value, which can be realised through either the sale of aircraft upon delivery or leasing them over their lifespan. The recent extension of these rights and the grant of new ones have increased their value to $115 million, reinforcing their strategic importance to Avation’s business model.

Q5: How is Avation performing in terms of lease revenues and cash collections?

A5: Avation is experiencing robust performance in lease revenues, which are currently at $7.9 million per month. Cash collections have also improved, reaching 105% as airline customers repay COVID-19-related arrears. This improvement in financial metrics reflects the recovering demand in the air traffic sector and effective management of lease agreements.

Q6: What are the potential risks associated with investing in Avation?

A6: As with any investment, there are risks involved. Potential risks for Avation include fluctuations in international air traffic demand, changes in aircraft market values, and potential delays or issues related to aircraft deliveries and lease agreements. Additionally, macroeconomic factors and geopolitical events can impact the aviation industry, affecting Avation’s financial performance and growth prospects.

Q7: What is WH Ireland’s view on Avation’s current share price?

A7: WH Ireland views the current share price discount to NAV as unjustified, given the substantial progress Avation has made in deleveraging its balance sheet and the broadly validated aircraft valuations in the market. Consequently, WH Ireland sees a fair value for Avation’s shares at 250p, suggesting significant upside potential from the current share price of 140p.

Q8: What are Avation’s future growth prospects and strategic plans?

A8: Avation’s future growth prospects are bolstered by its valuable ATR 72 purchase rights and the strategic sale or lease of these aircraft. The company’s ability to capitalise on improving market dynamics and increasing international air traffic demand positions it well for continued growth. Additionally, Avation’s focus on deleveraging its balance sheet and improving cash collections further strengthens its financial foundation for future expansion and value creation.

Written by: Anthony Fox

[z1co] 28/5/2024 12:05

Thanks cf456

Simon Thompson is also very bullish on the stock:

Second upgrade for Avation in a week

The value of purchase rights on new planes has rocketed, and so too have profit estimates

May 28, 2024
by Simon Thompson

Aircraft leasing company Avation (AVAP:143.5p), a lessor of 34 commercial aircraft, has materially upgraded guidance, prompting analysts to raise their earnings estimates for the second time in a week (‘An airline firmly in the ascent’, 20 May 2024).

Earlier this month, Avation exercised the purchase rights for delivery on 10 new aircraft with manufacturer ATR and restructured its aircraft purchasing plan. It resulted in the grant of new rights to purchase six aircraft and the extension of existing rights for 24 aircraft until 2034. The option value on these planes is significant given that Avation has the right to purchase them at a discount to the open market value.

[z1co] 28/5/2024 08:12

Damian Brewer, at Canaccord has a price target of £2.30 and is saying that the current share price is not pricing-in future revenue and profit uplift.

[z1co] 28/5/2024 08:07

WOW the 2 bit loss making trader is trying to give advice >>>>>>> on your bike loser.

Share price will rerate strongly over the coming weeks ahead of the July trading update

[z1co] 27/5/2024 11:24

Zak Mir also very bullish on the stock:




From 3.26 mins , worth listening.

[z1co] 26/5/2024 17:19

Latest interview with Proactive on the 13th May 2024:

[bdbd11] 25/5/2024 19:47

On the last set of accounts released on 1st March, purchase rights were in the book at $88m. We have been told avap now value them at $115m ( though 34 x 5m is a lot more again, but spread over a long period). Therefore nav will jump forward at next declaration. Perhaps someone can calculate what that 27m usd transfers to in pence per share?

[z1co] 25/5/2024 18:53

Fishbourne

You never know the share price could well rerate towards £3 again over the next 12 months now that the company's fleet is once again fully deployed after nearly 4 years.

Damian Brewer, at Canaccord has a price target of £2.30 and is saying that the current share price is not pricing-in future revenue and profit uplift.

The £2.30 target was prior to "significant profit beat" announced yesterday.

No doubt guidance will now be upgraded for the current and next year.

[fishbournetrader] 25/5/2024 15:58

And not only was the business booming but they had interest from a potential buyer and started a formal process to sell the company.

And whilst we do not know who the potential buyer was, it is fair to say that the interest must have been at a price reasonably above 300p, which was the share price at the time.

[z1co] 25/5/2024 07:55

Last month the company successfully delivered its last remaining off-lease ATR 72-600 aircraft to PNG Air Limited ("PNG Air") for a 72-month lease at a market lease rate.

The company's fleet of 34 aircraft is now fully utilised for the first time since the Covid-19 pandemic.

Trading from April must has been very strong and ahead of management expectations , forcing the company to issue a trading update yesterday prior to it's year end.

In 2020 just before the start of Covid-19 when the company's business was booming the shares were trading above £3.

[z1co] 25/5/2024 07:37

Nice coverage in the Daily Mail market report - " STOCK WATCH "