It is unclear how Sydney’s Airport’s 8% first half earnings growth fared against the broker’s forecast, other than "performing well". FY guidance for 9% growth is reaffirmed. Growth was achieved on flat aircraft movements, the broker notes, which is helpful to the longer term capacity outlook.
Growth is expected to moderate over the next few years and risks include greater government intervention, a potentially weaker aeronautical agreement on renewal in 2020, and pending debt maturities that are 60% unhedged on the broker’s calculation.
Neutral and $7.30 target retained.
Target price is $7.30.Current Price is $7.36. Difference: ($0.06) – (brackets indicate current price is over target). If SYD meets the UBS target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).