8. Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR)
Average Price Target Upside Potential According to Analysts: 15.84%
Average Share Price Target Projected by Analysts: $311.94
Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR), commonly known as ASUR, is a Mexican company that holds the concessions to operate, manage, and develop 9 airports in the southeast region of Mexico. ASUR operates six airports in northern Colombia, including Medellín’s international airport, the second busiest in Colombia. Additionally, the company holds a 60% stake in the capital stock of Aerostar Airport Holdings, LLC, operator of Luis Muñoz Marin International Airport in San Juan, the capital of Puerto Rico. The airport serves as a key entry point for international flights to the island as well as continental flights from the US.
In the second quarter of 2024, total passenger traffic reached nearly 18 million, marking a 3% increase year-over-year. Growth in Puerto Rico and Colombia helped offset a nearly 5% decline in Mexico, where domestic traffic was affected by Pratt & Whitney engine issues and reduced capacity at Mexico City Airport. Colombia saw the highest growth, with a 21% increase in traffic, while Puerto Rico experienced a 9% year-over-year rise.
ASUR also benefits from non-aeronautical revenue sources, including retail, food services, and leasing, which provide further stability and growth opportunities. In the Q2 2024 earnings call, management shared that Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR) is focused on expanding its commercial offerings, having opened 45 new commercial spaces in the last year. This includes 17 locations in Mexico, 4 in Puerto Rico, and 33 in Colombia. As a result, commercial revenues grew by 7% year-over-year, with increases of 4% in Mexico, 9% in Puerto Rico, and a remarkable 40% in Colombia. Commercial revenue per passenger rose by 5% year-over-year to nearly MXN 128 in Q2 2024.
During the Q2 2024 earnings call, CEO Adolfo Castro reported that Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR) maintains a strong financial position, holding nearly MXN 15 billion in cash and cash equivalents. It also paid out MXN 6.3 billion in dividends this quarter. This includes a cash dividend of MXN 10.926 per share and an extraordinary cash dividend of MXN 10 per share, demonstrating the company’s commitment to returning value to shareholders while maintaining a healthy cash balance.
Over the past 10 years, Grupo Aeroportuario del Sureste SAB de CV (NYSE:ASR) has delivered impressive growth, with both its top line and bottom line expanding by an average of 17% annually. A robust financial performance combined with its cheap valuation presents a compelling investment opportunity. ASR is trading at only 11.85 times its forward earnings, a 38% discount to its sector.
Analysts are also bullish on ASR. The 12-month median price target of $311.94 set by analysts indicates a potential upside of 15.84% from the current stock price.
