Scotiabank has updated its outlook on Grupo Aeroportuario Del Sureste (ASURB: MM) (NYSE: ASR), increasing the stock's price target to Peso800.00 from the previous Peso780.00.
The firm sustained its Sector Outperform rating on the stock.
The adjustment comes amid a review of the company's financial prospects and market positioning. The analyst from Scotiabank noted that while Grupo Aeroportuario Del Pacifico (GAP) has had its rating downgraded to Sector Perform from Sector Outperform, ASUR maintains a favorable outlook. The rationale behind GAP's downgrade is attributed to the market having partially priced in its new Master Development Plan (MDP).
The analyst further elaborated on the concerns regarding GAP, highlighting its vulnerability due to a premium that could lead to a potential de-rating of Mexican assets. This vulnerability is particularly poignant in light of the current financial environment and market trends.
Additionally, Scotiabank expressed caution regarding Volaris, GAP's largest domestic carrier, which has faced challenges managing the grounding of its A320neo planes. The situation with Volaris could result in a prolonged period of grounded planes, extending until mid-2025 or later, which may affect GAP's performance.
In other recent news, Southeast Airport Group, also known as Grupo Aeroportuario del Sureste (NYSE:ASR), has reported significant growth in the second quarter of 2024. The company's total revenues saw an approximately 18% increase to MXN 7 billion, and passenger traffic rose by 3%, primarily due to strong performance in Colombia and Puerto Rico. Commercial revenues also experienced a 7% boost across all regions.
The company has been dealing with the Pratt & Whitney engine recall and monitoring potential impacts from the US election campaign. Southeast Airport Group's cash balance is primarily in US dollars, with a significant portion being approximately $400 million. Furthermore, the company has distributed dividends of MXN 6.3 billion to shareholders in recent months.
InvestingPro Insights
Recent data from InvestingPro underscores Grupo Aeroportuario Del Sureste's (ASUR) robust financial health and market position. With a market capitalization of $8.78 billion and a P/E ratio of 14.19, ASUR appears to be trading at a reasonable earnings multiple. This is further supported by an adjusted P/E ratio over the last twelve months as of Q2 2024, which stands at 14.14, indicating consistency in the company's valuation.
The company has demonstrated impressive revenue growth, with a 7.15% increase over the last twelve months as of Q2 2024, and an even more substantial quarterly revenue growth of 20.1%. Additionally, ASUR's gross profit margin is notably high at 63.43%, reflecting efficient operations and strong management of costs. These factors, combined with a dividend yield of 5.41%, suggest a favorable return for investors.
Two InvestingPro Tips highlight ASUR's positive trajectory: the company holds more cash than debt on its balance sheet and has a high shareholder yield, which includes dividends and buybacks. These tips, among the 17 additional ones available on InvestingPro, provide valuable insights for investors considering ASUR as part of their portfolio. For more detailed analysis and tips, interested parties can visit InvestingPro's dedicated page for ASUR at https://www.investing.com/pro/ASR.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.