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Investing.com -- Shares of Aéroports de Paris (EPA:ADP) were down more than 4% on Thursday following its full-year 2024 results, which came in largely in line with expectations but maintained a conservative outlook for 2025.
The airport operator reported a 5.7% year-on-year increase in group EBITDA, meeting its initial guidance of over 4% growth, while reaffirming its projection for EBITDA growth of more than 7% in 2025.
However, BofA Securities suggests that management is guiding cautiously, with the bank’s own estimates for next year sitting 4% ahead of AdP’s forecast.
Passenger traffic, a key performance driver, is expected to grow between 2.5% and 4.0% in 2025, unchanged from prior guidance.
Meanwhile, retail sales per passenger, another critical revenue stream, saw only a slight upward revision in expectations, with management now targeting growth of 4-6% over 2023 levels.
This adjustment remains modest given that 2024 retail sales were already up 4.9% compared to 2023, though the company cited potential headwinds, including intensified construction work and lower advertising revenues.
Capital expenditure projections for 2025 have been reduced, with AdP now planning to spend €1 billion at its Parisian airports and €1.4 billion across the group, down from earlier forecasts of €1.2 billion and €1.8 billion, respectively.
While lower capex is often seen as a positive in the airport sector, particularly given the reliance on regulatory tariff reviews, the new figures align closely with market expectations.
Breaking down the second half of 2024, AdP’s EBITDA came in at €1.125 billion, surpassing consensus estimates of €1.075 billion.
The aviation segment posted EBITDA of €276 million, slightly below consensus, while the retail and services unit underperformed, with €394 million in EBITDA compared to a consensus of €422 million.
This shortfall was attributed in part to a €35 million revenue gap related to the sale of surplus electricity capacity in 2023.
However, strong performances from real estate and international assets offset some of the weakness, with international EBITDA reaching €304 million, ahead of market expectations.
BofA Securities maintains a "buy" rating on AdP with a price target of €155, citing an attractive valuation.
The brokerage notes that AdP’s Parisian assets trade at roughly 8 times estimated 2025 EV/EBITDA, compared to peers at 9.5-10.5 times.
BofA continues to see upside potential, driven by expected sequential improvements in passenger traffic, steady retail momentum, and resilient trends in international operations, particularly at its Turkish subsidiary, TAV Airports.