RE:Dividends Deutsche Bank Downgrades Chorus Aviation to Hold, Cuts Target to $2.40
MIDNIGHTTRADER - Updated 7 hours ago
02:08 PM EST, 02/28/2024 (MT Newswires) -- Chorus continues to execute on its deleveraging plan, improving its balance sheet flexibility by continuing to reduce debt. As of the December quarter, its leverage ratio was 3.6x (down from 4.4x at year-end) and is getting closer to its targeted long-term leverage ratio of 2.5x - 3.5x.
Deutsche thinks that once Chorus fully transitions to an asset-light leasing model, the company will achieve greater scale in its leasing business and generate more free cash flow that can be deployed to pursue accretive investment opportunities and/or return capital to common shareholders. However, with the delay of Fund 3 (Chorus is targeting the end of 2024 for the launch) and the continued decline in earnings during the transformation.
2024 EPS estimate falls from $0.33 to $0.22.
Deutsche also believes the stock lacks a near to mid-term catalyst to justify a Buy rating. Downgrading to a Hold. The new 12-month per share price target is $2.40, from $3.15.
Price: 2.14, Change: +0.05, Percent Change: +2.39