KUALA LUMPUR: Three research houses have lowered their earnings forecasts on AirAsia Bhd after the low-cost carrier posted lower net profit in the second quarter.
RHB Research Sdn Bhd, MIDF Research and CIMB Equities Research, however, maintained their "buy" and "outperform" calls on the stock.
RHB Research reduced its AirAsia earnings forecasts by 10.8 per cent for this year and five per cent for 2014 due to a higher decline in the fare yield.
"We now expect the fare yield to decline five per cent this year and two per cent next year," it said in its research note yesterday.
RHB Research revised its target price of the stock to RM3.78 from RM3.98 based on price-earnings ratio of 10 times, which it said is the average among the regional peers.
RHB Research's "buy" stance remains, given the higher contribution from AirAsia's other associates and also that their growth story will be a catalyst to the stock price.
MIDF Research also kept its "buy" call but lowered its the earnings forecast of the airline's associates from RM107 million in 2013 to RM65 million. This is in anticipation of wider losses from Philippines Air Asia, its loyalty programme BIG and the Expedia JV.
The firm, however, retained its earnings estimates for 2014.
The research house kept the stock's fair value of RM3.94 based on the 2014 financial year price-earnings ratio of 13 times.
CIMB Equities reduced its AirAsia target price from RM4 to RM3.45 and its core earnings per share forecasts by 14 to 19 per cent for the 2013 to 2015 financial years.
However, it maintained its "outperform" call.
HLIB Research, meanwhile, said while it expects stronger earnings in the second half due to seasonally stronger air travel demand, it maintained its "hold" recommendation and target price of RM3.08 for AirAsia.
It said the outlook of Thailand Air Asia and Indonesia Air Asia remained positive as both had experienced stronger passenger growth and market share.
The stock fell 8.05 per cent, or 24 sen, to RM2.74 with 36.67 million shares changing hands. Its low was RM2.69.