On Friday, BofA Securities launched coverage on shares of TAV Havalimanlari Holding AS (TAVHL:TI) (OTC: TAVHY), bestowing a Buy rating on the company's stock along with a price target of TRY335.00. The new price target indicates a potential 20% increase from the current trading level. The company, with a market capitalization of $2.92 billion, has demonstrated remarkable performance with a 120% year-to-date return.
The analyst at BofA Securities highlighted several factors contributing to the positive outlook for TAV Havalimanlari, which is 46% owned by Aeroports de Paris. The firm identified structural growth drivers that are expected to bolster traffic growth. According to InvestingPro, the company shows strong financial health with 10 additional investment insights available to subscribers.
Moreover, BofA anticipates an inflection in free cash flow (FCF) starting in 2025 as capital expenditures decline from their peak and earnings before interest, taxes, depreciation, and amortization (EBITDA) rise. These EBITDA gains are predicted to be fueled by a new structure for the Ankara airport concession and a potential increase in tariffs at Almaty airport.
Moreover, BofA's Economics team projects that foreign exchange pressures will begin to subside from 2025 onwards, further contributing to the company's favorable prospects.
In terms of financial metrics, BofA's analysis suggests that TAV Havalimanlari is trading at an estimated 9% free cash flow to equity (FCFE) yield for 2025, which is more than double the average of its peers, which stands at 4.2%.
Supporting this value proposition, InvestingPro data shows the stock trading at an attractive P/E ratio of 9.24, with EBITDA reaching $474.51 million in the last twelve months. This comparison underscores the investment firm's positive stance on the stock's value relative to its counterparts in the industry.
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