Citi notes Sydney Airport amassed 16.9m international passengers 2019 of which 1.2m were going to or from China.
The broker also notes, while there is never an optimal time, the outbreak of the coronavirus immediately ahead of Chinese New Year could have a larger than normal impact.
The broker estimates 20-27% of Chinese visits to Sydney occur during February and March. The best case scenario is a -0.5% impact on operating earnings while the broker’s bear case could be -5-7%.
Citi reduces 2019-21 operating earnings estimates by -0.3-2.6%. Sell rating maintained. Target is reduced to $6.94 from $7.06.
Sector: Transportation.
Target price is $6.94.Current Price is $8.15. Difference: ($1.21) – (brackets indicate current price is over target). If SYD meets the Citi target it will return approximately -17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
