You mean just like a large Rat does :D
Not quite. Interesting that Craigs are the most optimistic, I'd say realistic about AIR with their value $3.30 but notwithstanding picking circa 38 cents EPS for FY16 are forecasting that as the peak, like many other brokers with EPS tailing off to 26 cps in FY17. Quite how brokers think they can pick such a dramatic tailing off in earnings in FY17 remains a mystery to me. What if they're wrong and growth just keeps on coming :) (Sits and waits for another explanation from Mod regarding peak PE's relative to normal year PE...perhaps some explanation of how they're so psychic with picking the peak of the earnings cycle so far out would be useful :)). I reckon all this peak of the cycle is nonsense. Economy is hardly firing off like a rock star is it !!
We have EPS this year of circa 34 cents and that's on most of the year paying quite a lot for fuel and we have a 10 year normal PE of 10, (you could argue to use 11-12 seeing as all PE's are super stretched because of ultra low interest rates which will remain so for the foreseeable future. Apply a PE of 11 to 34 cents and you get fair value of $3.74. Simple. Its too far out to reliably predict FY17 results in this industry so all brokers estimates are just guesses as far as I'm concerned. Fair value to me is $3.50-$3.75.