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Zurich Airport – An absolute success story in the descent News

Friday, September 8th, 2017 | Economy

Course performance one year: 19.4 percent; Performance three years: 84.9 percent; Five years: 193.9 percent. This is the share of Zurich Airport, one third of which is owned by the canton and 5.6 per cent of the city of Zurich, and in which the well-known shareholder Blackrock holds 3.2 per cent.
These are success figures. But since the presentation at the end of August, when the share reached a record high of 249.8 francs, a clear slump in the price is evident. In the last ten trading days alone, the title has yielded to 12 percent and is now at the lowest level since the end of April. Such a case in such a short time is seldom in the case of Zurich Airport.

The Zurich Airport share price for one year (Graph: cash.ch)
How can this be explained? Certain risks are buzzing around when it comes to Zurich Airport: Firstly, the crisis of Air Berlin, which is one of the five most important airlines on the site alongside Swiss, Edelweiss Air, Lufthansa and British Airways. In addition, the duty-free operator Dufry is now being renovated in the second half of the year, which dampens the frequency at these very lucrative locations.
In the longer term, one also wonders whether real estate management is expecting the large-scale project "The Circle", and whether it is politically feasible to expand the airport if necessary. The revenue share from the airline business is only 60 percent (as of the first half-year 2017) for the company group, the rest comes from real estate management and other income. The orientation of the company changes.
High rating
On the other hand, the rapid price development also means that the share is highly valued. At the end of August, the price / earnings ratio (P / E ratio) was 28, clearly higher than at the Vienna International Airport (20) or the Frankfurt airport operator Fraport (24). The Brokerhaus Kepler has already advised the sale of the stock for some time, analysts like Z├╝rcher Kantonalbank advise "market weights". But is all this enough to explain a visible decline in prices as it has been observed in recent days?
Pascal Furger, analyst at Bank Vontobel, reassured: "The price decline looks to me for a temporary breather." The valuation of the share is higher than in the past, but this is justified. "The half-year figures were good, and the guidance on passenger growth was raised from 5 to 6 percent."
The background of this is that Swiss will be able to transport more passengers to Europastrecken with the latest fleets, the C-Series regional aircraft from Bombardier.
SWISS takes over more & more space from SR Technics at ZRH, Bogenhangar is used by SWISS to present its C-Series https://t.co/O1LbquAm1K
– SRTechnics_News (@SRTechnics_News) September 3, 2017
But then there is still the possible disappearance of Air Berlin. According to the Vontobel analyst, this is not a threat: "Air Berlin's crisis has caused some uncertainty, but the airline has apparently paid all the bills, and other airlines are expanding at Zurich Airport, or using larger aircraft like Swiss."
Dufry will renovate the duty-free shops and thus dampen the frequency, but this will be the same next year. The real estate project "The Circle", on the other hand, has a pre-letting rate of 50 percent, which at least indicates that the forecasts for the use are intact. The major building project is to be opened in 2020.
Furger is among the analysts for whom the stock still has upside potential. He recently increased the price target from 250 to 275 francs. Should the share fall again in the current tense environment, Zurich Airport is still worth considering. Whoever holds the stock already does not have to repel it. Under close scrutiny, however, you should generally get titles that have already risen relatively strongly and are relatively expensive.
Abr man can also see this way: Around 10 percent of the turnover makes the airport with its car parks. Anyone who knows the succesful parking fees must almost assume that this company will have a long financial success.


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