On Friday, BofA Securities analyst Carlos Peyrelongue updated the financial outlook for Grupo Aeroportuario del Pacifico (NYSE:PAC) SAB de CV (GAPB:MM) (NYSE: PAC), increasing the price target to Peso 439.20, up from the previous Peso 403.00. The firm has maintained a Buy rating on the company's stock.
Currently trading at $183.84, PAC boasts an impressive financial health score of "GREAT" according to InvestingPro analysis, which offers comprehensive insights through its Pro Research Report, available for over 1,400 US-listed companies.
The revised price target comes with an optimistic view on the company's future earnings before interest, taxes, depreciation, and amortization (EBITDA). Grupo Aeroportuario is expected to see a significant 30% EBITDA growth for the year 2025.
This growth projection is supported by an approved 26% increase in the Mexican weighted average tariff and a forecasted recovery in total traffic to 3.9%. The company's strong operational efficiency is evident in its impressive 79.58% gross profit margin, with revenue growth forecast at 37% for FY2024.
The expected increase in traffic is partly attributed to the resolution of airline capacity constraints, which have been affecting Volaris due to Airbus engine recalls. These constraints are anticipated to end in the second half of 2025. Volaris's exposure to Grupo Aeroportuario is significant, with the latter handling 43% of Volaris's traffic, compared to 26% and 12% for Oma and Asur, respectively.
Grupo Aeroportuario's stock is currently trading at a 2025 estimated enterprise value to EBITDA (EV/EBITDA) multiple of 10.8 times, while its current EV/EBITDA stands at 12.82x. This is 1.4 times higher than the average multiple of its industry peers, Asur and Oma.
Despite the premium, the company's projected EBITDA growth is 2.8 times higher than that of its peers. With a market capitalization of $9.25 billion and a P/E ratio of 21.79, InvestingPro analysis suggests the stock is slightly overvalued at current levels. Discover more valuable insights and 8 additional ProTips with an InvestingPro subscription.
BofA Securities also commented positively on Asur, citing its attractive valuation and growth prospects. Asur is trading at an 11% discount to its four-year average historical EV/EBITDA multiple, with an expected 10.8% EBITDA growth for 2025.
On the other hand, Oma is viewed less optimistically due to its less attractive valuation and growth combination. It is trading at a 2% premium to its four-year historical average EV/EBITDA multiple, with a projected 10.6% EBITDA growth for the same period.
In other recent news, Grupo Aeroportuario del Pacífico (GAP) unveiled an ambitious expansion plan in its third-quarter 2024 earnings call. The company disclosed a MXN43.2 billion 2025-2029 Master Development Plan aimed at enhancing its 12 airports. Despite a dip in passenger traffic, GAP reported an increase in non-aeronautical revenues and overall revenue. The company's balance sheet remains solid with MXN15.8 billion in cash equivalents and a net debt-to-EBITDA ratio of 1.8 times.
The expansion plan includes a 40% allocation of total CapEx for terminal building expansions, targeting a 54% increase in space and 37% more security checkpoints. The company also anticipates a 5% traffic growth in 2025, with EBITDA margins projected between 50% and 55%.
Recent developments also include GAP's initiatives to develop new cargo terminal facilities, focusing on the automotive sector and markets like Tijuana, Puerto Vallarta, and Cabos. The company expects a 25% revenue increase for the cargo facility in 2024 compared to the previous year.
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