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On Thursday, Citi downgraded Antin Infrastructure Partners SA (ANTIN:FP) from Buy to Neutral and reduced its price target to €14.30 from €15.60. The downgrade comes despite a recent 6% increase in Antin's share price, which was attributed to the company's ability to exceed small forecasts in funds from operations under management (FPAUM) and earnings. Additionally, Antin confirmed its guidance for 2024, following a period of repeatedly lowered forecasts.
The analyst expressed concerns regarding new guidance that suggests longer investment cycles, which may lead to significant consensus downgrades. Citi's revised estimates anticipate a marked decrease in management fees and fee-related earnings (FRE) for the fiscal year 2025 and projects FRE to remain steady from 2024 to 2026. These projections are approximately 13% below the consensus earnings estimates for the fiscal years 2025 to 2027.
Despite Antin's alignment with long-term structural growth opportunities, the firm's expectation of a lack of near-term earnings growth and catalysts may deter potential investors. According to Citi's revised forecasts, Antin is trading at 14 times its fiscal year 2026 estimated FRE, which is below its peers but also reflects slower growth expectations.
The analyst concluded that while the rating has been downgraded to Neutral with a high-risk (HR) designation, Antin's shares could become more appealing as the next fundraising cycle approaches.
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