Global Airports valuations at discount to Aerospace but premium to Airline stocks

5 July 2018, Global – We have launched a series of reports to track whether the global transport stocks’ valuations have bottomed out following their recent correction for your easy reference. In our fourth report, we will focus on the listed airports and airline service providers (at airports) globally.

The global airports & airline service providers sector is trading at 20.5x P/E currently, a 16% discount to its historical average valuation in the past 5 years.

Valuations of Global Airlines are Closest to the Bottom, followed by Airports, then Aerospace companies

Comparing the P/E valuations of the three inter-linked sectors, the global airports & airline service provider sector is also trading at a smaller discount to its historical 5-year average valuation compared to the global airlines’ 28% discount but are at a larger valuation discount to the global aerospace sector’s 4% discount.

The global airports and airline service provider companies’ P/E valuations are still 63% above their historical trough levels. This compares with 44% for the global airlines and 106% for the global aerospace sector.

Chart: Valuations of Global Airlines are Closest to the Bottom, followed by Airports, then Aerospace companies

Valuations of Global Airlines are Closest to the Bottom, followed by Airports, then Aerospace companies

Chart: Global Airports & Airline Service Providers – Current P/E Valuations (2018)

Global Airports & Airline Service Providers – Current P/E Valuations (2018)

Chart: Global Airports and Airline Service Providers Current P/E Valuations versus Historical Average and Trough Valuations in Past 5 Years

Global Airports and Airline Service Providers Current P/E Valuations versus Historical Average and Trough Valuations in Past 5 Years

7 listed airports & airline service providers are  trading below or near their historical trough valuations

There are 3 companies, Japan Airport Terminal, Cardig Aero Services and TAV Havalimanlari (Istanbul) which are already trading below their historical trough valuations.

In addition, 4 companies are trading less than 30% above their historical trough valuations. These include Southern Airports (Vietnam), Beijing Capital Internationanl Airport, Grupo Aeroportuario del Centro Norte and Sydney Airport.

In contrast, 6 airports and airline service providers are trading at more than twice their historical average valuations. These include Guangzhou Baiyun International Airport, Samui Airport, Shenzhen Airport, Airports of Thailand, Malaysia Airports Holdings and Kobenhavns Lufthavne (Copenhagen).

Chart: Global Airports & Airline Service Providers: Current P/E Valuations versus Trough Valuations in Past 5 Years

Global Airports & Airline Service Providers- Current P/E Valuations versus Trough Valuations in Past 5 Years

More than half of the global airports and airline service providers are trading below their 5-year average historical valuations

Overall, 58% of the global airports and airline service providers’ valuations have fallen below their 5-year historical average valuations following the recent market correction.

Among them, Southern Airports (Vietnam), Japan Airport Terminal, Sydney Airport, Cardig Aero Services, TAV Havalimanlari (Istanbul) are trading at the deepest discounts to their 5-year historical average valuations.

Chart: Global Airports and Airline Service Providers: Current P/E Valuations versus 5-Year Average Historical Valuations

Global Airports and Airline Service Providers- Current P/E Valuations versus 5-Year Average Historical Valuations

Note: Stocks with upside of more than 10% based on our fair value are assigned an Outperform rating. Stocks with downside of more than 10% based on our fair value are assigned an Underperform rating. Stocks with upside or downside of less than 10% based on our fair value are assigned an In-line rating. These are Crucial Perspective’s proprietary rating classifications and by no means serve as investment recommendations.

Independent Research Declaration: Crucial Perspective does not own any position in the equities featured in this report nor have we received any compensation for writing this report. 

 

Related Reports:

Have global airline valuations bottomed yet?

Global shipping stocks to correct further if trade weakens

Global Aerospace stocks prove more defensive in recent market correction

 

Disclaimer: The contents of this website are strictly for information purposes only.  This website does not contain any investment, financial, tax, legal or insurance advice; you should always seek such advice only from professionals who are qualified, licensed and regulated in the respective relevant field.  Please read our Terms of Service before accessing or using this website.