Macquarie is of the view as a long-duration asset, the key to Sydney Airport Holdings’ valuation is not the exact timing of re-opening in the next 12 months but stabilising passenger traffic.
Any medium-term recovery will be impacted by fleet downsizings by the airlines, the broker believes, along with pauses on new aircraft deliveries. Looking at global airports, the broker suggests passenger traffic may not reach 2019 levels until 2024-26.
Having said that Macquarie thinks Syndey Airport still offers value and sees upside around pricing.
Macquarie reiterates its Outperform rating with the target price rising to $6.66 from $6.06.
Target price is $6.66.The current Price is $5.74. Difference: $0.92 – (brackets indicate current price is over target). If SYD meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).