Bernstein selects Europe's top airport stocks

Investing.com – Bernstein has released its latest ranking of European airport operators, highlighting the divergence in prospects among the key players in this sector.

The ranking was created as European airports navigate complex environments, including passenger traffic recovery patterns, infrastructure investment needs, and evolving tariff agreements.

1. Fraport - Bernstein rates this German airport operator as a “buy” with a target price of €84.00, calling it a “sustained positive transformation story.”

The company emphasizes that Fraport’s expensive investment projects are nearing completion, coinciding with favorable tariff agreements.

Although domestic passenger traffic growth is not expected to fully recover before the end of this decade, the lack of capacity constraints and upgraded retail space offer significant upside potential.

Ground services are improving as operational issues are resolved, operating leverage is recovering, and prices are expected to increase after renegotiating contracts with major client Lufthansa Group.

Bernstein highlights that Fraport’s international portfolio includes high-quality assets, with Antalya and Greece being important sources of profit. The firm notes that Fraport’s transformation story has only just begun.

2. Flughafen Zurich - Bernstein assigns this Swiss airport operator a hold rating, with a target price of CHF 255.00, describing it as “a victim of its own success.”

Over 80% of the company’s implied enterprise value is attributable to domestic assets. The airport has consistently exceeded allowed returns in the past cycle, partly due to a significant increase in passenger traffic, pushing the stock price up more than 50% above pre-pandemic levels.

However, Bernstein warns of poor tariff prospects and a substantial increase in capital expenditures to address capacity constraints and aging infrastructure.

The firm also expresses concerns about the group’s greenfield project in Noida, India, citing multiple delays, uncertainties, and ambitious passenger traffic forecasts.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.