In this article, we will explore the 10 best airport stocks to buy.
Passenger Traffic Rebound: Airport Industry Poised for Growth
The airport industry plays a crucial role in facilitating global connectivity, enabling the movement of people and goods across borders. The performance of the airport sector can significantly influence economic growth and development worldwide.
Passenger traffic in the global air travel industry is experiencing a strong rebound as it recovers from the impact of COVID-19. According to Airports Council International (ACI), global passenger volume is projected to reach approximately 8.7 billion in 2023, which is 95% of the pre-pandemic levels seen in 2019. This represents a significant year-over-year growth of 31% from 2022 levels. Looking ahead, 2024 is expected to be a landmark year, with passenger numbers predicted to surpass 2019 levels for the first time since COVID-19, reaching around 9.7 billion passengers, or 106% of the 2019 volume. This represents a 12% year-over-year growth from 2023 levels.
The long-term outlook for the airport and air travel industry is also promising, with total passenger traffic expected to grow at a compound annual growth rate (CAGR) of 4.3% from 2023 to 2042. ACI forecasts indicate that by 2042, global passenger traffic could nearly double the 2024 projection, reaching close to 20 billion passengers.
However, factors such as high global inflation, slowdown of global GDP, extreme weather events, and geopolitical conflicts could introduce substantial risks and uncertainties in future forecasts.
Prioritizing Sustainable Growth and Efficiency
As the airport industry expands, sustainability and efficiency have become key focuses. Airports are implementing energy-efficient lighting and exploring the use of sustainable fuels to lessen their environmental impact.
London Heathrow Airport, one of the busiest airports in the world, is among the airports that are committed to sustainability. Since 2017, the airport has been sourcing 100% renewable electricity to power its terminals. As part of its sustainability strategy, the airport aims to cut carbon emissions on the ground by at least 45% by 2030 compared to 2019 levels. This includes enabling passengers to access the airport sustainably, transitioning to zero-carbon vehicles, and investing in efficient infrastructure.
Airports are committed to optimizing operations and enhancing the passenger experience, while also making significant investments in infrastructure upgrades to support future growth.
On August 30, Bloomberg reported that Schiphol Group NV, the owner of Amsterdam Airport, has announced a significant investment of EUR 6 billion ($6.7 billion) over the next five years to upgrade the airport’s infrastructure. This investment is the largest in the airport’s history and it will focus on renewing essential systems such as baggage handling, climate-control systems, escalators, and taxiways. The airport is also seeing a recovery in passenger traffic, with expectations of welcoming between 65 million and 68 million travelers in 2024.
The airport industry remains resilient and focused on delivering a seamless and sustainable travel experience for passengers. With continued investment and innovation, the sector is well-positioned for long-term growth and success. Now that we have discussed some of the key trends in the global airport industry, let’s take a look at the 10 best airport stocks to buy.
A daytime aerial view of an airport bustling with planes and staff.
Methodology
To compile our list of the best airport stocks to buy, we first consulted stock screeners from Finviz and Yahoo Finance, along with online rankings, to create an initial list of the largest publicly traded airport companies. From this list, we selected the stocks that analysts believe have the most potential for growth. We ranked the best airport stocks to buy based on their average price target upside potential according to analysts, as of September 11, 2024.
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10 Best Airport Stocks To Buy
10. Grupo Aeroportuario del Pacífico SAB de CV (NYSE:PAC)
Average Price Target Upside Potential According to Analysts: 10.13%
Average Share Price Target Projected by Analysts: $187.00
Grupo Aeroportuario del Pacífico SAB de CV (NYSE:PAC), also known as GAP, is a leading Mexican airport operator that manages 12 airports across the Pacific region of the country. The airports serve cities, metropolitan areas, and tourist destinations in the region. The company also generates revenue from non-aeronautical activities including commercial services, car parking, shops, hotels, restaurants, food and beverage, and VIP lounges.
GAP experienced a number of challenges in the second quarter of 2024, with passenger traffic declining by 3.9% to 15.3 million due to ongoing inspections of A320neo and A321neo engines. The decline in passenger traffic caused revenue to drop by 3.3% compared to the previous year, reaching MXN 213 million in the second quarter of 2024. On the bright side, the company saw a notable increase in commercial revenue, rising nearly 11%, driven by food and beverage sales, car rentals, and VIP lounge usage.
During the second quarter, Grupo Aeroportuario del Pacífico SAB de CV (NYSE:PAC) added three international and two domestic routes, contributing to a total of 13 new routes added in just the first half of the year. The company expects to add around 11 international routes in the second half of 2024. This highlights GAP’s commitment to expanding its network and enhancing customer experience.
On July 9, Grupo Aeroportuario del Pacífico SAB de CV (NYSE:PAC) opened a second VIP lounge at Vallarta Airport to better accommodate the high demand from travelers. Additionally, in June, the company completed the acquisition of a 51.5% stake in Guadalajara World Trade Center (GWTC), a cargo services provider. GWTC generated over MXN 1 billion in revenue in 2023, with an impressive EBITDA margin of around 40% and no debt. This strategic acquisition is expected to boost GAP’s financial performance and position the company well for future success.
Analysts are also bullish on PAC. Analysts currently hold a consensus buy rating on the stock and the 1-year median price target of $187.00 set by analysts indicates a potential upside of 10.13% from current levels.
Despite the company’s recent quarterly performance being less than ideal, its overall financial results have been strong and consistent in recent years. Over the past ten years, Grupo Aeroportuario del Pacífico SAB de CV (NYSE:PAC) has achieved a compound annual growth rate (CAGR) of 16.89% in its revenue, while its net income has grown at a CAGR of 14.21% during the same period.
9. Aena SME SA (OTC:ANNSF)
Average Price Target Upside Potential According to Analysts: 12.72%
Average Share Price Target Projected by Analysts: $228.68
Aena SME SA (OTC:ANNSF) is a Spain-based company that ranks among the largest airport companies in the world. It is primarily engaged in the operation and management of airports and heliports. In Spain, the company manages a network of 46 airports and 2 heliports. Through its subsidiaries and affiliates, the company is present in 33 airports in five countries outside of Spain.
The company’s core business segments include airport management and operations, aeronautical services, commercial services, and infrastructure development. Aena SME SA (OTC:ANNSF) generates revenue from user fees charged to airlines, retail and commercial activities within airport terminals, advertising, parking services, and real estate services.
What sets Aena SME SA (OTC:ANNSF) apart is its extensive international footprint. With operations spanning Brazil, the United Kingdom, Mexico, and Colombia, the company has positioned itself well to capitalize on growth opportunities in diverse markets.
In the first half of 2024, the company delivered impressive financial results. Aena SME SA’s (OTC:ANNSF) passenger traffic grew by 10.5% to 172.7 million. This surge in passenger numbers, coupled with strong performance in both aeronautical and commercial revenue streams, contributed to a 17.7% rise in total consolidated revenue, reaching EUR 2.74 billion.
The company also reported strong cash generation. Net cash from operating activities amounted to EUR 1.40 billion in the first half of 2024 compared to EUR 1.04 billion in the same period last year. Aena SME SA’s (OTC:ANNSF) net profit for the period stood at EUR 808.6 million, a significant increase compared to EUR 607.7 million in the first half of 2023. EBITDA grew by 32.9% to EUR 1.55 billion.
Brazil is a key market for Aena SME SA (OTC:ANNSF). The consolidation of the 11 airports of the Block of Eleven Brazilian Airports (BOAB), managed by Aena Brasil, contributed EUR 91.1 million to revenue and EUR 50.4 million to EBITDA in the first half of 2024.
ANNSF is one of the best airport stocks to buy according to analysts. Analysts have a consensus buy rating on the stock and the 12-month median price target of $228.68 set by analysts indicates a potential upside of 12.72% from current levels.
The company has managed to grow its top line at a compound annual growth rate (CAGR) of 6.35% over the past ten years, while its bottom line has increased at a CAGR of 10.77% during the same period.
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.
7. Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB)
Average Price Target Upside Potential According to Analysts: 17.59%
Average Share Price Target Projected by Analysts: $78.49
Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB), better known as OMA, is a Mexican airport operator that ranks among the best airport stocks to buy. The company holds the concessions to operate, manage, and develop 13 international airports in the central and northern regions of Mexico. OMA’s unique business model focuses on developing and operating airports that serve a diverse mix of metropolitan areas, tourist destinations, regional centers, and border cities. This balanced portfolio allows the company to capitalize on growth opportunities in different sectors. Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) airports serve major cities like Monterrey, as well as popular tourist destinations such as Acapulco, Mazatlán, and Zihuatanejo. Additionally, the company operates the NH Collection Hotel located in Terminal 2 of Mexico City airport and the Hilton Garden Inn at Monterrey airport.
OMA provides a range of airport and commercial services to passengers and clients within its facilities. The majority of the company’s revenue comes from aeronautical services, which include passenger charges, landing fees, parking fees, and airport security charges. In addition to these regulated services, Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) also generates significant income from commercial activities, such as restaurants, retail shops, duty-free stores, car rentals, and parking. The company is focused on creating new revenue streams through businesses that complement air travel, including hotels, real estate, and logistics services.
Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) is showing promising signs of potential growth, making it an attractive stock to consider. In Q2 2024, the company reported a total passenger traffic of 6.5 million, slightly down by 2.4% from the second quarter of last year. This was primarily due to external factors like the Pratt & Whitney engine recall. However, international passenger traffic surged by 12% compared to the second quarter of 2023, largely driven by strong performance at Monterrey Airport, which saw significant increases in routes to cities like Atlanta, Las Vegas, Toronto, and Orlando. In the first half of 2024, the company launched six new international routes, further strengthening OMA’s connectivity and positioning the company well for future growth.
In the second quarter of 2024, Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) reported an 11.9% increase in commercial revenues year-over-year, with notable growth in VIP lounges, parking, and restaurants. The company successfully completed the expansion of the Terminal A East public area, adding over 6,000 square meters of space, which includes new documentation counters and commercial outlets, increasing Monterrey International Airport’s capacity to 13.9 million passengers annually. OMA is also actively investing in expanding and remodeling terminal buildings in Ciudad Juárez, Torreon, Culiacan, Durango, and Mazatlan.
During the Q2 2024 earnings call, CEO Ricardo Dueñas Espriu announced that Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) invested MXN 816 million in its Master Development Program, along with major maintenance and strategic projects. These investments and developments reflect the company’s commitment to enhancing its infrastructure and operational capabilities to support future growth and improve passenger experience.
Over the past ten years, Grupo Aeroportuario del Centro Norte SAB de CV (NASDAQ:OMAB) has grown its revenue at a compound annual growth rate (CAGR) of 15.44%, while its net income has increased at a CAGR of 15.11% during the same period. Over the past 10 years, the company has also grown its levered free cash flow by more than 43%.
As of September 11, OMAB’s stock is trading at $66.75, and analysts have a consensus buy recommendation for the stock. The median 1-year stock price target set by analysts is $78.49, indicating a potential upside of 17.59% from its current price.
6. Aeroports de Paris SA (OTC:AEOXF)
Average Price Target Upside Potential According to Analysts: 19.83%
Average Share Price Target Projected by Analysts: $155.19
Aeroports de Paris SA (OTC:AEOXF), commonly known as Groupe ADP, is a leading airport operator that manages the full spectrum of airport activities, from engineering and design to operations and infrastructure development. The company owns and operates the three main airports in Paris – Charles de Gaulle, Orly, and Le Bourget – as well as several other aerodromes in the region. Groupe ADP operates a network of 26 airports worldwide through concessions and management contracts. However, through its subsidiaries, activities, and businesses combined, the company is active in over 100 airports across 50 countries.
In addition to its core aviation business, Aeroports de Paris SA (OTC:AEOXF) offers a range of commercial services, including shops, restaurants, hotels, parking, and real estate development, to provide a comprehensive experience for passengers while also generating non-aeronautical revenue.
The company’s diversified revenue model and commitment to sustainable growth make it an attractive investment option for investors seeking exposure to the recovering aviation industry.
Aeroports de Paris SA (OTC:AEOXF) reported strong operating and financial performance in the first half of 2024, with total revenue reaching EUR 2.88 billion, a 13.4% increase compared to the same period last year. Total Groupe ADP passenger traffic increased by 9.7% year-over-year to reach 170.2 million. Groupe ADP benefited from the rise in traffic and robust retail activity, which saw sales per passenger increase to EUR 31.7, up 7.1% compared to the same period last year. The company reported an EBITDA of EUR 943 million, reflecting a 9.3% increase, while net income attributable to the Group surged by 64.5% to EUR 347 million. The company’s operating income from ordinary activities surged by 51.7% to EUR 681 million in the first half of 2024.
On top of this, Groupe ADP made extensive preparations for the Paris 2024 Olympic and Paralympic Games, positioning itself to benefit significantly from the event. The preparations included the opening of a new Metro Line 14 station at Paris-Orly Airport on June 24th, reducing travel time to the city center to just 20 minutes. To accommodate increased passenger traffic at Paris-Charles de Gaulle Airport, the company reopened Terminal 2C and Terminal 2A, achieving full operational capacity at CDG for the first time since 2018. In order to provide the best experience for all travelers, faster security scanners were introduced at the airports in Paris.
During the Olympic Games, Aeroports de Paris SA (OTC:AEOXF) successfully managed a significant volume of luggage and passenger traffic, which is expected to positively impact its upcoming earnings and financial performance report.
Analysts are also bullish on AEOXF. 6 analysts have a buy rating on the stock. The median 12-month stock price target set by analysts for AEOXF is $155.19, which indicates a potential upside of 19.83% from current levels.
5. Flughafen Zürich AG (OTC:UZAPF)
Average Price Target Upside Potential According to Analysts: 20.39%
Average Share Price Target Projected by Analysts: $275.87
Flughafen Zürich AG (OTC:UZAPF) is the owner and operator of Zurich Airport, Switzerland’s largest airport, and is involved in managing several airports abroad. The company operates in various regions, including Latin America, where it is involved in the operation of eight airports. Flughafen Zürich AG (OTC:UZAPF) is currently constructing a new greenfield airport in Noida, India, to serve the Delhi metropolitan area. This international expansion will allow the company to leverage its expertise gained in Zurich to create new long-term revenue streams. The company’s core activities include operating transport hubs, managing commercial centers, and developing real estate.
The company’s strategic investments and international projects are expected to drive future growth and profitability, making it an attractive option for investors. In the first half of 2024, Flughafen Zürich AG (OTC:UZAPF) invested CHF 275.4 million in property, plant, equipment, and various projects, a significant increase from CHF 162.9 million in the previous year. This includes the development of landside passenger zones at Zurich Airport, which will expand retail and dining options and improve passenger flow by autumn 2027. In June, the company also completed the main phase of its new baggage sorting system at Zurich Airport, which will be replacing the old system fully by 2027.
Additionally, construction on the company’s largest international project in the Delhi area is entering its final phase, with Noida International Airport set to open as the city’s second airport by the end of April 2025. In the first half of 2024, additional licenses were awarded for ground handling, managing commercial areas, and key maintenance contracts.
Flughafen Zürich AG (OTC:UZAPF) also completed the operational take-over of Natal International Airport in Brazil in February 2024. The airport currently has a capacity of 6.5 million passengers annually and operates under a 30-year concession agreement.
With traffic numbers slightly exceeding expectations, Flughafen Zürich AG (OTC:UZAPF) reported strong financial results in the first half of 2024. Total revenue reached CHF 631.1 million, a 9% increase compared to the same period in 2023 and 107% of the 2019 figure. Aviation revenue grew by 13% to CHF 313.5 million, while non-aviation revenue increased by 7% to CHF 317.6 million. Revenue from foreign business increased by 20% to reach CHF 49 million in the first half of 2024.
The company’s EBITDA rose by 7% to CHF 346.8 million, up 14% compared to the first half of 2019. This led to a positive consolidated result of CHF 151.8 million, surpassing the previous best half-year result from 2019 by 6%.
Strong traffic numbers during the first half of the year positively impacted commercial revenue on both the airside and the publicly accessible landside. Total commercial and parking revenue rose by 5% compared to the first half of 2023, reaching CHF 133.8 million. Additionally, real estate revenue grew by 1% to a new all-time high of CHF 98.2 million, highlighting the strength of the real estate sector as a reliable business area for the company.
UZAPF is one of the best airport stocks to buy according to analysts. Analysts have a consensus buy rating on the stock and the 1-year median price target of $275.87 set by analysts indicates a potential upside of 20.39% from current levels.
4. Fraport AG (OTC:FPRUF)
Average Price Target Upside Potential According to Analysts: 25.70%
Average Share Price Target Projected by Analysts: $65.33
Fraport AG (OTC:FPRUF) is a leading global airport operator headquartered in Frankfurt, Germany. The company owns and manages Frankfurt Airport, one of the busiest aviation hubs in Europe. Through its portfolio of companies, Fraport AG (OTC:FPRUF) also holds interests in the management and operation of several other airports around the world. The company offers a diverse range of airport services, including flight and terminal operations, ground handling, airport management, parking, security, retail, real estate, and consulting services.
The German group has a presence in several markets, including Brazil, Peru, Bulgaria, Slovenia, Turkey, Greece, China, India, and the United States. However, on September 9, Fraport AG (OTC:FPRUF) signed an agreement to sell its entire 10% stake in Delhi International Airport to its majority owner, GMR Airports Infrastructure Limited, for USD 126 million. This transaction is expected to be completed in the first quarter of 2025, indicating that Fraport may soon exit the Indian market.
The company stands out as a promising investment option due to its notable growth in earnings and impressive financial performance. In the first half of 2024, total revenue rose by 13% year-over-year to reach EUR 2.04 billion, driven by growing demand for air travel. Fraport AG’s (OTC:FPRUF) international business was a key driver of revenue growth, particularly its operations in the United States, Peru, and Greece. The takeover of center management at Washington D.C.’s Dulles and Ronald Reagan airports boosted Fraport USA’s revenue, while Lima and Fraport Greece benefited from strong passenger traffic. The positive performance of these international subsidiaries helped the group deliver strong financial performance in the first half of 2024.
Passenger numbers increased by 7.2% to a total of 74.1 million travelers across Fraport AG’s (OTC:FPRUF) airports in the first half of 2024. The company’s EBITDA reached EUR 567.1 million, reflecting a 17.8% increase, while net profit surged nearly 90% to EUR 160.8 million, showcasing the effectiveness of the company’s operational strategies and investments. As a result, basic earnings per share rose to EUR 1.63 in the first half of 2024, compared to EUR 0.87 in the first half of 2023.
Analysts are also bullish on FPRUF and have a consensus buy rating on the stock and the 12-month median price target of $65.33 set by analysts indicates a potential upside of 25.70% from current levels.
3. TAV Havalimanlari Holding AS (OTC:TAVHF)
Average Price Target Upside Potential According to Analysts: 31.03%
Average Share Price Target Projected by Analysts: $10.26
TAV Havalimanlari Holding AS (OTC:TAVHF) is a leading airport operator based in Turkey. The company manages a portfolio of 15 airports across eight countries, including major hubs. The company provides a wide range of services, such as airport operations, ground handling, private security, retail, duty-free shopping, food and beverage, car parking, and bus services.
The company’s growth potential comes from its active expansion and modernization efforts, combined with a strong focus on sustainability and innovative solutions. One of TAV’s recent key achievements was the opening of the new international terminal at Almaty Airport in Kazakhstan on June 1, 2024. The terminal increases the airport’s annual passenger capacity to more than 14 million. The new terminal utilizes the latest technology and features a range of world-class services to enhance operational efficiency and passenger experience, while also being certified under the IFC’s Excellence in Design for Greater Efficiencies (EDGE) program for its environmentally friendly design.
In the first half of 2024, TAV Havalimanlari Holding AS (OTC:TAVHF) served 46 million passengers, a 17% increase compared to the same period in 2023. International traffic grew by 20%, contributing to the group’s strong financial performance. Revenue increased by 31% year-over-year to reach EUR 732 million, while net income reached EUR 81 million. CEO Serkan Kaptan highlighted that the net income for the first half of 2024 was only 13% lower than the record high achieved in 2018. This performance indicates that the investments made by TAV Havalimanlari Holding AS (OTC:TAVHF) over the past three years are starting to pay off.
The company is also making steady progress on its investment projects in Antalya and Ankara. The Antalya International Airport expansion project is 84% complete and expected to open in Q1 2025, while the Ankara airport development project is 58% finished and expected to be completed in Q4 2025. Antalya and Ankara airports have seen strong international passenger growth of 14% and 30%, respectively. The timely completion of these projects will help accommodate the rising demand for air travel in these regions.
TAV Havalimanlari Holding AS (OTC:TAVHF) has improved its earnings as a result of robust financial performance. The company’s EBITDA grew by 47% year-over-year, reaching EUR 215.4 million during the first half of 2024.
According to TAV Havalimanlari Holding AS (OTC:TAVHF) guidance for the full year 2024, the company expects revenue to fall within the range of EUR 1.50 – 1.57 billion, while EBITDA is projected to reach between EUR 430 – 490 million.
TAV Havalimanlari Holding AS (OTC:TAVHF) is one of the best airport stocks to buy according to analysts. 4 analysts have a buy rating on the stock. The median 12-month stock price target set by analysts for TAVHF is $10.26, which indicates a potential upside of 31.03% from current levels.
2. Japan Airport Terminal Co. Ltd. (OTC:JAIRF)
Average Price Target Upside Potential According to Analysts: 35.36%
Average Share Price Target Projected by Analysts: $47.73
Japan Airport Terminal Co. Ltd. (OTC:JAIRF) is a Japanese airport operations company that is primarily focused on the construction, management, and operation of passenger terminals at Tokyo-Haneda International Airport. The company’s business includes facility maintenance and management, leasing commercial spaces to airlines and retailers, merchandise sales at domestic and international terminals, passenger services, and commissioned activities such as duty-free shop operation. Japan Airport Terminal Co. Ltd. (OTC:JAIRF) also has a presence at other major Japanese airports like Narita International Airport, Kansai International Airport and Central Japan International Airport, where it provides wholesale services and operates duty-free shops and retail stores. Additionally, the company operates retail stores at Chengdu Shuangliu International Airport in China.
JAIRF is well-positioned to benefit from the recovery in air travel as global tourism continues to rebound. In the fiscal year 2023, ending on March 31, 2024, Japan Airport Terminal Co. Ltd. (OTC:JAIRF) reported that domestic flight passenger numbers rebounded to about 90% of pre-COVID19 levels, driven by an increase in travel demand. Meanwhile, international flight passengers exceeded pre-pandemic figures, reaching an all-time high thanks to strong inbound demand.
The consolidated results for the fiscal year ending March 31, 2024, show that Japan Airport Terminal Co. Ltd. (OTC:JAIRF) experienced growth in all business segments, including facilities management, merchandise sales, and food and beverage. Operating revenue surged by 92% compared to the previous fiscal year, reaching JPY 217.5 billion. The growth was mainly led by strong performances in facilities management and merchandise sales, which grew by 45% and 169% respectively compared to the previous fiscal year.
Japan Airport Terminal Co. Ltd. (OTC:JAIRF) exceeded its sales and income forecasts and the company achieved record highs in both operating income and ordinary income. In response to this positive performance, JAIRF increased its year-end dividend by JPY 12 from the forecast made in October 2023. The company also added a commemorative dividend of JPY 5 per share to celebrate its 70th anniversary, resulting in a dividend of JPY 42 per share. This will result in an annual dividend of JPY 67 per share and a payout ratio of 32%.
Analysts have a positive outlook on JAIRF, with price targets indicating potential upside, reflecting confidence in the company’s ability to maintain profitability. The median 1-year stock price target set by analysts is $47.73, which indicates a potential upside of 35.36% from current levels.
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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