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Investing.com -- JPMorgan made adjustments to its ratings within the Mexican airports sector.
Grupo Aeroportuario del Centro Norte, known as OMA, was downgraded to Underweight from Neutral, while Grupo Aeroportuario del Pacifico (NYSE:PAC), referred to as GAP, received an upgrade to Neutral from Underweight. ASUR, another major player in the sector, retained its Overweight rating, continuing as JPMorgan’s preferred choice.
The reassessment of these stocks by JPMorgan is a response to the recent performance trends. OMA’s stock had previously seen a six-month outperformance against its peers by 26 percentage points, bringing its valuation closer to that of GAP, which traditionally commanded a higher market premium.
This surge was attributed to OMA’s robust traffic growth and the market’s anticipation of its forthcoming Master Development Program. However, JPMorgan analysts now believe these factors are sufficiently factored into OMA’s current stock price.
In contrast, GAP’s shares lagged, trailing its competitors by 18 percentage points over the same period. This underperformance prompted JPMorgan to upgrade GAP’s stock rating, seeing more balanced valuation levels after the recent shifts in stock prices.
JPMorgan maintains a positive outlook on the Mexican airports sector overall, citing its defensive business model, reliable cash flow, and minimal balance sheet risks. These attributes position the sector as a relative safe haven within the broader Latin America Transportation coverage.
Despite this, JPMorgan’s updated price targets imply only modest potential for stock price appreciation, ranging from 0 to 8 percent. Consequently, the firm suggests investors adopt a more conservative stance towards the airport segment, advocating for a smaller allocation while still keeping some investment exposure in these assets.
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