Sydney Airport’s 2020 result was hit by one-offs with operating income an estimated $130m in the second half versus last year’s $687m. UBS has downgraded the operating income forecast for 2021 to $543m assuming a slower recovery pace and no final dividend.
International traffic continues to be the primary driver of cashflow recovery and the broker does not expect 2019 levels to be achieved until 2024.
Given the tug of war between the pressure from rising bond yields and positivity around the global vaccination rollout, UBS prefers to stick to Neutral with the target falling to $6 from $6.60.
Sector: Transportation.
Target price is $6.00.Current Price is $6.08. Difference: ($0.08) – (brackets indicate current price is over target). If SYD meets the UBS target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
