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On Friday, Deutsche Bank (ETR:DBKGn) analysts upgraded Fraport (ETR:FRAG) AG Frankfurt Airport Services Worldwide stock from Sell to Hold. The analysts also raised the price target to €50 from the previous €40. According to InvestingPro data, the stock is currently trading at $37.35, near its 52-week high, with a P/E ratio of 14.29x.
The analysts noted that while several downside risks to Fraport shares are well-flagged, markets appear to be focusing on potential growth driven by German fiscal measures. The stock has risen 37% since its lows in August 2024, even though earnings per share forecasts for 2025 and 2026 have decreased by 14% and 21%, respectively. InvestingPro analysis shows the stock has delivered a strong 20.48% YTD return, with 6 additional exclusive insights available for subscribers.
Despite the challenges such as airlines not adding significant capacity due to structural issues, high operational and financial leverage (with a debt-to-equity ratio of 2.55x), and rising debt maturities, the analysts do not foresee any unknown catalysts that could drive the stock lower. The company maintains strong liquidity, with current assets exceeding short-term obligations at a ratio of 1.61x.
The analysts highlighted that the current peak valuations and potential for de-rating through a period of declining consumer confidence are risks already known to the market.
Given these factors, Deutsche Bank decided to upgrade the stock to Hold, reflecting the lack of unknown downside catalysts and the revised price target.
In other recent news, Jefferies has downgraded Fraport AG Frankfurt Airport Services Worldwide’s stock rating from Hold to Underperform, citing economic concerns. This decision comes as Jefferies analysts express apprehension over the sustainability of Fraport’s recent stock increase, which has risen by approximately 25% over the past six months. The analysts have lowered the stock’s price target from EUR58.00 to EUR52.00, reflecting a more cautious outlook. They highlight Fraport’s reliance on U.S. travelers and business travel, which could make the company susceptible to earnings per share downgrades. Jefferies has revised its passenger forecasts downward, anticipating a potential slowdown in transatlantic travel. Consequently, the firm has adjusted its EPS estimates for Fraport by 5-12%, placing them 5-18% below the consensus. These adjustments are attributed to the anticipated impact of the current economic situation on Fraport’s performance. Jefferies suggests that if the broader economic outlook worsens, further pressure on passenger volumes could occur.
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