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On Tuesday, Barclays (LON:BARC) analyst Pablo Monsivais downgraded shares of Grupo Aeroportuario del Pacifico SAB de CV (GAPB:MM) (NYSE:PAC) from Overweight to Equalweight, with a slight reduction in the price target from Peso414.00 to Peso412.00. The adjustment comes after a period of strong performance, with the company achieving a 28% annual return in 2024.
The downgrade reflects a more cautious stance from Barclays as the potential for upside in the stock is seen as limited in the current higher risk environment. Despite Grupo Aeroportuario del Pacifico's successful negotiation of a Master Development Plan last year, analysts believe that the company's fundamentals are now adequately priced into the market valuation.
Barclays acknowledged the clarity on regulated tariffs in Mexico for the upcoming five years and noted that airlines' seat capacity plans are in line with consensus and their estimates for the next two quarters. However, they see little opportunity for earnings surprises in the near term.
The firm's discounted cash flow (DCF) valuation indicates only a 4% upside potential for Grupo Aeroportuario del Pacifico. The stock is currently trading at an enterprise value to adjusted EBITDA 12-month forward (EV/Adj. EBITDA 12MF) multiple of 10 times. This represents a 28% premium over competitor ASUR, which trades at 7.2 times, and a 20% premium over OMA, trading at 8.0 times.
Barclays concluded their assessment by estimating Grupo Aeroportuario del Pacifico's internal rate of return (IRR) at 13.3%, suggesting that while returns are expected, the prospects for significant stock appreciation may be limited.
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