Airport operators remain a buy despite macro risks, says Barclays

Investing.com -- Barclays (LON:BARC) has reaffirmed its “overweight” rating on Amadeus (BME:AMA), a global travel technology provider, despite ongoing macroeconomic and geopolitical pressures impacting air traffic. 

Amadeus is set to report second-quarter results on July 31. Barclays expects bookings growth to moderate to 1.3% year-over-year, down from 2.5% in Q1, reaching 119 million.

The deceleration is attributed to ongoing geopolitical tensions, particularly in the Middle East, and the timing of Easter, both of which have weighed on global air travel demand.

In the Air IT segment, passenger growth is projected to slow to 4.8% in Q2 from 5.5% in Q1, reaching 579 million.

This deceleration is partly due to the completion of Vietnam Airlines’ migration to Amadeus’ platform. 

However, the Hospitality & Other Solutions segment is forecast to rebound strongly, with organic growth expected to accelerate to 8.0% from -6.7% in Q1. 

Barclays anticipates continued momentum in this division through the second half of the year.

Total (EPA:TTEF) organic revenue growth for Q2 is projected at 5.9%, down slightly from 6.5% in Q1, reaching €1,615 million. 

This estimate is 2% below consensus, which Barclays attributes to underappreciated impacts from foreign exchange movements and geopolitical instability. 

Despite this, Amadeus is expected to maintain a stable adjusted EBITDA margin of 39.8%, translating to €643 million in adjusted EBITDA, also 2% below consensus.

Barclays has revised its EPS estimates for Amadeus down by 1–2%, reflecting reduced air traffic assumptions and adverse FX effects. 

Nevertheless, the brokerage anticipates normalization in air travel from Q3, supported by recent signs of geopolitical stabilization and strong summer booking trends reported by airlines.

Barclays expects Amadeus to reaffirm its full-year guidance, which includes 7.5% constant currency revenue growth for FY25, within the stated range of 7.4–11.4%.

The brokerage sees no need to adjust its €80 price target, which is based on 25x FY26 estimated clean EPS.

Amadeus’ business model, which relies on volume-driven growth rather than pricing leverage, is seen as a key strength in a volatile macro environment. 

Barclays also flags long-term growth potential in Air IT and Hospitality, particularly through the rollout of next-generation airline retailing platforms. 

These innovations position Amadeus to gain market share and enhance revenue diversification over time.

Despite near-term softness, Barclays maintains a positive long-term outlook, citing the company’s cost flexibility, stable margins, and strategic product pipeline as reasons to remain constructive on the stock.