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On Monday, BofA Securities updated its rating on Grupo Aeroportuario del Centro (NASDAQ:OMAB), moving it from Underperform to Neutral. The revision by analyst Carlos Peyrelongue at BofA Securities reflects a balanced view of the company’s prospects, acknowledging both positive and negative factors influencing the airport operator’s outlook. According to InvestingPro data, OMAB stands as a prominent player in the Transportation Infrastructure industry, with a market capitalization of $4.84 billion and an impressive gross profit margin of 68.55%.
The upgrade to a Neutral stance is primarily driven by two positive developments. First, the company has experienced a higher than anticipated increase in passenger traffic, which has jumped year-to-date by 11.7%. This surge is supported by a significant number of new routes that have been added. Secondly, the perceived risks associated with potential US tariffs have diminished, contributing to a more favorable view of the company’s future. The market has responded positively to these developments, with OMAB showing a strong YTD return of 46.59% and trading near its 52-week high.
However, the analyst also pointed out certain concerns that temper the more optimistic outlook. The valuation of Grupo Aeroportuario’s shares has reached a level 22.7% above the company’s four-year historical average EV/EBITDA multiple, which suggests a premium pricing. This observation aligns with InvestingPro analysis, which indicates the stock is trading at a P/E ratio of 18.42x and shows signs of being in overbought territory. Additionally, there are expectations of only a modest increase in the next Maximum Development Program (MDP) for maximum tariffs, projected at an increase of 3% to 5%. Despite these valuation concerns, the company maintains a strong financial health score and offers a substantial dividend yield of 4.57%.
In conjunction with the rating change, BofA Securities has also adjusted its price objective for Grupo Aeroportuario. The new target is set at P$266/US$110 per American Depositary Share (ADS), up from the previous target of P$207/US$84.80. This revised price objective factors in a lower cost of equity, now at 14.5%, increased adjusted EBITDA estimates by 4% for 2025 and 2026 compared to earlier projections, and a 10% reduction in capital expenditure estimates for the period from 2026 to 2035.
The report also includes a change in the Income Rating, which now stands at 7, indicating expectations for the same or higher income, adjusted from the previous rating of 8, which suggested the same or lower income. This change points to a more stable outlook for the company’s revenue generation capabilities.
In other recent news, Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., known as OMA, reported a notable 9.1% increase in passenger traffic for the first quarter of 2025, reaching 6.4 million passengers. Revenue from both aeronautical and non-aeronautical sources increased by 15.6%, with Adjusted EBITDA amounting to Ps.2,372 million. OMA’s net income for the quarter rose by 19.7% compared to the same period last year, resulting in earnings per share of Ps.3.33. Additionally, the company announced a cash dividend of Ps.4,500 million, to be distributed in two equal installments, with the first scheduled for May 2025. The dividend declaration follows approval from shareholders during the Annual General Ordinary Shareholders’ Meeting on April 25, 2025.
OMA also disclosed its annual filings for the fiscal year ending December 31, 2024, to both the U.S. Securities and Exchange Commission and Mexico’s National Banking and Securities Commission. The filings include the company’s Annual Report and Form 20-F, which are now publicly accessible. Furthermore, the company reported an 11.8% rise in passenger traffic in March 2025, attributed to the introduction of ten new routes. The majority of the traffic was commercial, with domestic and international traffic increasing by 11.9% and 11.5%, respectively. These developments reflect OMA’s ongoing commitment to financial transparency and growth in the aviation sector.
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