RE: Whats happening15 Apr 2024 13:08
TB, my take on this (and there are much more knowledgeable folk on here) is that AA4 has a finite amount of income due from its Emirates leases and therefore, all other things being equal, the share price should reduce by 2p per quarter as that income is paid out. Hence the drop from 40p to 38p after the recent divi, which is about where I would put fair value at the moment. FWIW, I see that finite income as something like:
2024(r): 6p
2025: 8p
2026: 6p
2027: 2p (based on warnings that once the income starts dropping it will drop quickly)
2028: 2p
So that implies 24p of dividend income over the next c. 5 years. Of course, there are things that change that:
- Another Emirate A380 due back in service soon
- Depends on overall useage of planes (trouble in the Middle East?)
- How much spare cash does AA4 have that isn't in the dividends?
- Will Thai Airways ever pay for the planes they use?!
But if we do get c.24p of dividends up to the end of the Emirates leases then it means you've got the value of the planes for 14pps! See other discussions for what they may be worth (especially comments by simonm). We should get our first indication early 2025 when news is released what DNA2 sell their A380s for (if they sell them). It will be a year later that AA4 try with their first aircraft that come off-lease.
Anyway, that's my take on why we have a gradually falling share price. It's the starter before the main course!
Guitarsolo