Near-term outlook is challenging, but positive in the medium- to long-term. The positive outlook for the medium- to long-term is underpinned by the expectation of volume growth driven by aviation demand and demand for quality food. Near-term challenges arising from trade tensions impacting cargo volumes, weaker emerging currencies and airline pressure from rising fuel costs.
Maintain Accumulate; new target price of $5.47 (previous $5.58)
Our lower target price is due to our lower associates/JVs estimate. We like the stock for its regional expansion story and growth initiatives. The strong cash flow generating business makes the 3.5% dividend yield sustainable. Our target price gives an implied FY19e forward P/E multiple of 24.3 times.