The -19% AIR move in reaction to the warning at the CMD was an over-reaction to the 10% downgrade because it was unexpected, and the trade was crowded due to its EUR leverage

That should be the final warning/rebase and the strong LT earnings story is back

There is still some uncertainty around the A330 , the A350 and how margins improve

At 40EUR and 12x earnings it was too cheap. But after a 15% rally and at 14.5x, the name now includes the move lower in the EUR

Whatever happens today ( we believe Mario will deliver and this will lead to a re-rating in European equities) we are happy to lock in the rally and look for a better entry point



Thursday • 11 December 2014 • 15:14

AIR CMD did not live up to expectations

Leading people to cut 2016 numbers

2016 EBIT was flat vs expectations of 8% growth

We are now off 15% in last two sessions

The downgrades are in the price for us

Trades on attractive multiples here and has limited downside to earnings.

We are happy to buy AIR sub EU41.20