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Investing.com -- UBS has upgraded Aena SME SA (BME:AENA) to "buy" from "neutral" and raised its 12-month price target to €26.80 from €22, citing improved expectations for regulatory tariffs and a reassessment of the company’s undervalued commercial business.
The upgraded valuation reflects revised forecasts for the 2027–2031 regulatory period (DORA III), where UBS now models an average annual tariff decline of 1%, compared to previous expectations of a 3% drop and a consensus of -1.7%.
This adjustment follows regulatory developments including €350 million in approved additional regulated capex and terminal expansion approvals at key airports like Barcelona.
Aena’s regulated asset base is projected to grow 35% from 2025 to 2031, with a modeled WACC of 7.75% underpinned by Spanish utility benchmarks.
On this basis, UBS increased its 2026–2029 EBITDA estimates by 5–10% and now expects a 2024–2028 EBITDA CAGR of approximately 5%.
Updated projections show EBITDA rising from €3,760 million in 2025 to €4,200 million by 2028.
EPS is expected to grow from €1.38 in 2025 to €1.59 by 2029, with a dividend yield holding near 5% mid-term. Net debt is projected at €4.86 billion in 2026, equivalent to a net debt/EBITDA ratio of 1.3x.
UBS also emphasizes that Aena’s commercial division is undervalued. The unit trades at about 14x EV/2026E EBITDA, below the pre-COVID average of 15.6x and peak levels in the high teens.
By comparison, real estate firms with shopping mall exposure trade at around 16.5x. Aena’s commercial assets are backed by >80% EBITDA margins, post-tax ROCE above 30%, and low capital intensity. A re-rating to a 4% FCF yield could imply 17% upside from current levels.
Retail EBITDA is forecast to grow at a 5.5% CAGR from 2025 to 2028, supported by self-help measures such as duty-free renovations, new food and beverage tenders, expanded VIP services, and car rental contracts.
Retail revenues are projected to rise from €1.87 billion in 2024 to €2.22 billion in 2027.
Retail spend per passenger is expected to outpace traffic growth, which is itself supported by mid-single-digit fleet expansions from major carriers like Ryanair, Iberia, and easyJet (LON:EZJ).
The revised €26.80/share target includes higher valuations for the regulated business (+€1.2/sh), retail segment (+€2.6/sh), land reserves (+€0.7/sh), and Brazil operations (+€0.35/sh).
At this price, Aena would trade at around 11.3x EV/2026E EBITDA, still below its historical average of about 12x.
Despite outperforming peers year to date, Aena trades at an about 11% discount to its five-year EV/EBITDA average.
UBS sees the improved regulatory backdrop and stronger commercial performance as catalysts for re-rating.