On Wednesday, UBS upgraded Flughafen (VIE:VIEV) Zurich AG stock, the operator of Zurich Airport, from Neutral to Buy. The firm also raised its price target on the stock to CHF 244.00 from CHF 205.00. The revised price target represents an increase in the firm's valuation of the airport operator's shares.
UBS highlighted Zurich as a "defensive asset" that appears undervalued compared to its peers when analyzed using Sum of the Parts (SoTP) valuation. The analyst identified three upcoming potential catalysts that could prompt a reevaluation of Flughafen Zurich's stock value.
These include an anticipated update to the dividend payout policy by the company's Board in March, the expected opening of Noida airport at the end of April 2025, and a projected acceleration in airline capacity allocated to Zurich starting from 2026.
The UBS analyst's commentary pointed out that these factors could lead to a positive shift in the market's perception of Flughafen Zurich's stock. The potential increase in dividend payout and the development of Noida airport are particularly notable as direct contributors to the company's financial growth prospects.
The upgrade to a Buy rating and the price target increase to CHF 244.00 from the previous CHF 205.00 per share reflect UBS's confidence in Flughafen Zurich's future performance. The firm's analysis suggests that the stock may offer a more attractive investment opportunity than previously assessed.
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