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Investing.com - Goldman Sachs raised its price target on Fraport (ETR:FRAG) AG Frankfurt Airport Services Worldwide (FRA:FRA) (OTC:FPRUY) to EUR94.00 from EUR90.00 while maintaining a Buy rating. The stock, currently trading at $42.44, has shown remarkable strength with a 73% return over the past year according to InvestingPro data.
The investment bank cited the upcoming conclusion of Terminal 3 construction in October, which will cap a 17-year investment cycle at Frankfurt Airport. Goldman Sachs noted this development would provide spare capacity for decades without requiring new infrastructure investment. With current revenue of $5.23 billion and a healthy current ratio of 1.6x, the company appears well-positioned to handle its operational needs.
The firm highlighted Fraport’s favorable regulatory environment, including a dual-till system and fee increases secured until 2028, which positions the company for significant free cash flow growth. Goldman Sachs maintained its steady-state FCF estimate of approximately EUR800 million by 2028.
Based on historical sector multiples of 15-18x FCF, Goldman Sachs projects Fraport’s market capitalization could reach between EUR12-14 billion later this decade, compared to EUR7 billion currently, indicating substantial upside potential.
The research note also mentioned that Fraport management comments during the Q2 conference call suggested increased likelihood of an initial dividend payment on 2025 results, which Goldman Sachs has now incorporated into its financial model.
In other recent news, Fraport AG Frankfurt Airport Services Worldwide has seen significant analyst activity. Jefferies has upgraded the company’s stock rating from Underperform to Hold, citing improved cash flow visibility. The firm also raised its price target from EUR52.00 to EUR70.00, indicating a positive outlook on Fraport’s financial management and capital expenditure control. Similarly, Deutsche Bank (ETR:DBKGn) upgraded Fraport’s stock from Sell to Hold, increasing the price target to €50 from €40. This upgrade reflects the analysts’ view that known risks are being overshadowed by potential growth opportunities linked to German fiscal measures. Despite a 37% rise in stock value since August 2024, Deutsche Bank noted a decrease in earnings per share forecasts for 2025 and 2026 by 14% and 21%, respectively. These recent developments highlight the evolving perspectives of financial analysts on Fraport’s future performance.
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