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HSBC upgraded Airports of Thailand PCL (AOT:TB) (OTC:AIPUY) stock rating from hold to buy on Wednesday, while lowering its price target to THB35.00 from THB40.00. According to InvestingPro data, the company maintains impressive gross profit margins of nearly 70% and a strong financial health score.
The upgrade comes despite a 50% decline in the stock since February 13, compared to a 20% drop for Thailand’s SET index during the same period, when news of KPD’s liquidity issues first emerged. The stock is currently trading near its 52-week low of $8.55, with InvestingPro analysis indicating oversold conditions.
HSBC cited expectations for a timely 60-day renegotiation of concessions that would reduce uncertainties and shift focus toward traffic recovery and revenue diversification for the airport operator.
The firm identified sequential recovery in Chinese arrivals and potential increases in passenger service charges as positive catalysts that could benefit Airports of Thailand.
HSBC now sees "favourable risk-reward" for the stock following its significant decline since mid-February.
In other recent news, Airports of Thailand has seen a notable shift in its stock rating. JPMorgan upgraded the company’s stock from Underweight to Neutral. This change comes amid an 18% decline in the company’s share price over the past month, which contrasts with a 7% drop in Thailand’s SET index. JPMorgan also adjusted its price target for Airports of Thailand to THB28.00 from THB32.00. The upgrade follows concerns over the company’s main concessionaire, King Power, which has requested a review of its duty-free contracts at all airports. This situation has led to JPMorgan revising its earnings per share estimates for fiscal years 2026 and 2027 downward by 28% and 27%, respectively. The firm assumes 2019 concession take-rates as the new base case, with clarity on final take-rates expected in two to three months. Despite these adjustments, JPMorgan does not foresee the stock returning to its 2013-2024 multiples due to anticipated lower margins and returns on capital.
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