(News Bulletin 247) – The bank revised its advice to “buy” against “hold” previously, estimating that the unfavorable winds for the airport operator should soon fade.

While the Paris Stock Exchange suffered this Tuesday, the SBF 120 losing 1.4% at the start of the afternoon, Aéroports de Paris managed to escape the ambient gloom.

The operator of Paris airports gained 2.7% around 4:55 p.m., signing by far the largest increase in the second largest index on the Paris Stock Exchange after the CAC 40.

The group is supported by Stifel which raised its advice from “hold” to “buy” on the value while increasing its price target to 148 euros against 130 euros previously. At Monday’s closing price, i.e. 104.9 euros, this target gives the stock a potential of more than 40%.

The bank points out that ADP has underperformed its peers for almost two years now due to a range of risks. Which includes the tax on transport infrastructure approved by France as part of the finance law for 2024, the corporate tax surcharge (contained in the finance bill for 2025), political instability in France or even the uncertainty over the future general director of the company. Augustin de Romanet must, in fact, hand over next January.

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Infrastructure tax compensation

But, according to Stifel, all of these headwinds should soon fade, especially with the change of direction at the beginning of 2025.

In addition, the Transport Authority (ART) confirmed that “the share retained in Aéroports de Paris’s tariff proposal of the tax on long-distance transport infrastructure could well be covered by airport charges”, ADP explained in October.

Clearly, this means that airport fee rates will be able to reflect the cost of this surcharge and that its negative impact would be eliminated with ADP’s new rates, which are due to come into force next April.

Consequently, Stifel believes that a “rerating”, i.e. an appreciation of ADP’s stock market multiples, should occur next year, supported by the good dynamics of the company in terms of its results and its cash generation.

Premium and Indian market

Furthermore, the bank emphasizes that if the European airport market has now reached maturity, ADP has several levers to improve its results. First, the company increased its exposure to premium commercial services, notably with its “Extime” brand, launched in 2023.

Stifel also highlights ADP’s positioning in regions with stronger growth than Europe, such as Turkey (via its 46.12% stake in TAV Airports) and India, through its stake of 49% in the Indian GMR group.

The bank also believes that the market could, in the long term, give more value to ADP’s share in GMR’s capital, which would again boost ADP’s share price. This will require an improvement in the fundamentals of the Indian group, which should be facilitated by the growth of the domestic market, as well as by better communication, Stifel list.