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Investing.com - JPMorgan downgraded Fraport (ETR:FRAG) AG Frankfurt Airport Services Worldwide (FRA:FRA) (OTC:FPRUY) from Overweight to Neutral while raising its price target to EUR73.00 from EUR66.00. The company, currently valued at $8.1 billion, has been trading near its 52-week high of $42.44.
The rating change follows Fraport’s strong year-to-date performance, with shares up 37% year-to-date and an impressive 73% over the past year, outperforming airport peers Aéroports de Paris (1%) and Aena (24%), as well as the broader infrastructure sector (19%) and wider market (8%). According to InvestingPro, the stock’s RSI indicates overbought conditions, with 13 additional real-time signals available to subscribers.
JPMorgan cited increased capital expenditure forecasts as a key factor in the downgrade, noting that management had referenced potential capex as high as EUR900 million for 2026 during recent earnings discussions, though this figure was later retracted.
The investment bank now estimates Fraport’s 2026 capital expenditure at approximately EUR800 million, representing an 11% increase to its previous forecast, while also raising its 2027 capex assumptions by about 30%.
With these higher capital expenditure estimates weighing on forecasted free cash flow yields and Fraport’s valuation now at the upper end of its peer group at 11x forward EV/EBITDA (current EV/EBITDA at 12.2x), compared to Aena at 10.8x and Aéroports de Paris at 9.1x, JPMorgan sees less justification to prefer Fraport over its European airport peers. InvestingPro analysis suggests the stock is currently overvalued, with a "GOOD" overall financial health score despite its significant debt burden.
In other recent news, Fraport AG has seen several analyst upgrades and price target adjustments. Deutsche Bank (ETR:DBKGn) upgraded Fraport’s stock from Sell to Hold, raising the price target to €50 from €40, citing potential growth driven by German fiscal measures despite known risks. Jefferies also upgraded Fraport’s stock rating from Underperform to Hold, increasing the price target to €70 from €52, due to improved cash flow visibility and tighter capital expenditure control. Additionally, Goldman Sachs raised its price target for Fraport to €94 from €90, maintaining a Buy rating. Goldman Sachs pointed out the completion of Terminal 3 construction, which marks the end of a long investment cycle at Frankfurt Airport and is expected to provide additional capacity for decades. These developments reflect a shift in analyst sentiment toward Fraport, driven by factors such as infrastructure completion and fiscal policies. The upgrades indicate a more optimistic outlook on Fraport’s financial stability and growth potential.
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