1. Corporación América Airports SA (NYSE:CAAP)
Average Price Target Upside Potential According to Analysts: 38.08%
Average Share Price Target Projected by Analysts: $21.90
Corporación América Airports SA (NYSE:CAAP) is one of the world’s biggest airport operators, currently operating 52 airports across Latin America and Europe. The corporation acquires, develops, and operates airport concessions, serving millions of customers each year. Corporación América Airports SA’s (NYSE:CAAP) generates revenue through aeronautical and commercial services. The majority of income comes from fees charged to departing passengers, as well as landing and parking fees for aircraft operators using the airport facilities. Additionally, the company generates revenue through commercial services, which include duty-free shops, retail and food outlets, advertising, and parking fees. This diversified revenue model allows the company to benefit from both passenger spending and operational fees from airlines.
In the first quarter of 2024, the company secured a 10-year extension for its Punta del Este international airport concession in Uruguay, demonstrating its ability to maintain and expand its operations. Additionally, CAAP received a favorable $91 million arbitration award related to the Chinchero International Airport project in Peru, where the company owns a 50% stake. The company is actively engaged in negotiations to expand airports in Yerevan and Florence, while also evaluating new projects in various regions to grow its global airport portfolio.
Corporación América Airports SA (NYSE:CAAP) is making strategic moves to drive future growth, positioning it as an attractive investment opportunity. However, the company’s financial performance in Q2 2024 experienced a downturn compared to the same period last year. Total revenues for the quarter reached $416.2 million, down from $422.7 million recorded in Q2 2023, reflecting a 1.5% year-over-year drop. This decline was influenced by a 7.8% year-over-year decline in total passenger traffic, which fell to 18.2 million from 19.7 million in the same quarter last year. Operating income also saw a decline, dropping to $92.9 million in Q2 2024 from $110.4 million in Q2 2023. Despite these setbacks, the company maintained a solid cash position, with cash and cash equivalents totaling $439.4 million as of June 2024, up from $369.8 million at the end of 2023.
Investors might be concerned about the performance of Corporación América Airports S.A. (NYSE:CAAP) in the most recent quarter but that shouldn’t detract them from the really solid long-term returns generated by the company over five years. As of September 11, CAAP’s share price has risen by an impressive 202% over the last five years. Moreover, the company’s earnings per share (EPS) have grown at a compound annual growth rate (CAGR) of 32.84% over the past five years and its net income has increased at a CAGR of 32.94% during the same period.
CAAP can be considered cheap at current levels. It is trading at over 12 times its forward earnings. Analysts have a consensus buy recommendation for the stock, and their median price target of $21.50 reflects an upside of 47.66% from current levels.
Overall, CAAP ranks first among the 10 best airport stocks to buy. While we acknowledge the potential of airport companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CAAP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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