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Investing.com -- Jefferies analysts downgraded Fraport AG (ETR:FRAG) to “underperform” from “hold” and cut the price target to €52 from €58, citing rising risks to earnings amid weakening transatlantic travel and economic uncertainty, in a note dated Monday.
Fraport’s shares, which rallied about 25% over the past six months, are now seen as vulnerable to a pullback, analysts said.
The company’s heavy exposure to U.S. and business travelers, which make up about 40% of Frankfurt Airport’s traffic, leaves it more sensitive to a slowdown in passenger volumes compared with peers.
Jefferies lowered its earnings estimates by 5% to 12% through 2027, projecting 2025 earnings per share at €4.50, down from €4.75.
Analysts now expect Fraport’s EBITDA for 2025 and 2026 to fall 2.5% and 3.6% below consensus, respectively.
The firm said that Fraport’s operational leverage magnifies the impact of lower traffic and that operating expenses will rise faster than the market expects, especially as the company opens Terminal 3 in 2026. A weaker dollar, which affects about €200 million of EBITDA, also poses a headwind.
While Fraport’s free cash flow is forecast to improve from 2027 as major projects conclude, dividend visibility remains limited until then. Management turnover expected around 2027 adds to uncertainty, Jefferies said.
The brokerage values Fraport on a sum-of-the-parts basis and now applies a 10% discount to the regulated asset base for Frankfurt operations, reflecting lower expected returns. Fraport trades at about 10.8 times EV/EBITDA, near three-year valuation highs.
Jefferies analysts concluded that slowing passenger trends, rising costs and macroeconomic risks outweigh the potential longer-term recovery in Fraport’s shares.