We recently compiled a list of the 10 Best Airport Stocks To Buy. In this article, we are going to take a look at where TAV Havalimanlari Holding AS (OTC:TAVHF) stands against the other airport stocks.
Passenger Traffic Rebound: Airport Industry Poised for Growth
The airport industry plays a crucial role in facilitating global connectivity, enabling the movement of people and goods across borders. The performance of the airport sector can significantly influence economic growth and development worldwide.
Passenger traffic in the global air travel industry is experiencing a strong rebound as it recovers from the impact of COVID-19. According to Airports Council International (ACI), global passenger volume is projected to reach approximately 8.7 billion in 2023, which is 95% of the pre-pandemic levels seen in 2019. This represents a significant year-over-year growth of 31% from 2022 levels. Looking ahead, 2024 is expected to be a landmark year, with passenger numbers predicted to surpass 2019 levels for the first time since COVID-19, reaching around 9.7 billion passengers, or 106% of the 2019 volume. This represents a 12% year-over-year growth from 2023 levels.
The long-term outlook for the airport and air travel industry is also promising, with total passenger traffic expected to grow at a compound annual growth rate (CAGR) of 4.3% from 2023 to 2042. ACI forecasts indicate that by 2042, global passenger traffic could nearly double the 2024 projection, reaching close to 20 billion passengers.
However, factors such as high global inflation, slowdown of global GDP, extreme weather events, and geopolitical conflicts could introduce substantial risks and uncertainties in future forecasts.
Prioritizing Sustainable Growth and Efficiency
As the airport industry expands, sustainability and efficiency have become key focuses. Airports are implementing energy-efficient lighting and exploring the use of sustainable fuels to lessen their environmental impact.
London Heathrow Airport, one of the busiest airports in the world, is among the airports that are committed to sustainability. Since 2017, the airport has been sourcing 100% renewable electricity to power its terminals. As part of its sustainability strategy, the airport aims to cut carbon emissions on the ground by at least 45% by 2030 compared to 2019 levels. This includes enabling passengers to access the airport sustainably, transitioning to zero-carbon vehicles, and investing in efficient infrastructure.
Airports are committed to optimizing operations and enhancing the passenger experience, while also making significant investments in infrastructure upgrades to support future growth.
On August 30, Bloomberg reported that Schiphol Group NV, the owner of Amsterdam Airport, has announced a significant investment of EUR 6 billion ($6.7 billion) over the next five years to upgrade the airport’s infrastructure. This investment is the largest in the airport’s history and it will focus on renewing essential systems such as baggage handling, climate-control systems, escalators, and taxiways. The airport is also seeing a recovery in passenger traffic, with expectations of welcoming between 65 million and 68 million travelers in 2024.
The airport industry remains resilient and focused on delivering a seamless and sustainable travel experience for passengers. With continued investment and innovation, the sector is well-positioned for long-term growth and success. Now that we have discussed some of the key trends in the global airport industry, let’s take a look at the 10 best airport stocks to buy.
Methodology
To compile our list of the best airport stocks to buy, we first consulted stock screeners from Finviz and Yahoo Finance, along with online rankings, to create an initial list of the largest publicly traded airport companies. From this list, we selected the stocks that analysts believe have the most potential for growth. We ranked the best airport stocks to buy based on their average price target upside potential according to analysts, as of September 11, 2024.
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An aerial view of a Hawaiian Airlines plane flying high overhead, with a stunning view of an island below.
TAV Havalimanlari Holding AS (OTC:TAVHF)
Average Price Target Upside Potential According to Analysts: 31.03%
Average Share Price Target Projected by Analysts: $10.26
TAV Havalimanlari Holding AS (OTC:TAVHF) is a leading airport operator based in Turkey. The company manages a portfolio of 15 airports across eight countries, including major hubs. The company provides a wide range of services, such as airport operations, ground handling, private security, retail, duty-free shopping, food and beverage, car parking, and bus services.
The company’s growth potential comes from its active expansion and modernization efforts, combined with a strong focus on sustainability and innovative solutions. One of TAV’s recent key achievements was the opening of the new international terminal at Almaty Airport in Kazakhstan on June 1, 2024. The terminal increases the airport’s annual passenger capacity to more than 14 million. The new terminal utilizes the latest technology and features a range of world-class services to enhance operational efficiency and passenger experience, while also being certified under the IFC’s Excellence in Design for Greater Efficiencies (EDGE) program for its environmentally friendly design.
In the first half of 2024, TAV Havalimanlari Holding AS (OTC:TAVHF) served 46 million passengers, a 17% increase compared to the same period in 2023. International traffic grew by 20%, contributing to the group’s strong financial performance. Revenue increased by 31% year-over-year to reach EUR 732 million, while net income reached EUR 81 million. CEO Serkan Kaptan highlighted that the net income for the first half of 2024 was only 13% lower than the record high achieved in 2018. This performance indicates that the investments made by TAV Havalimanlari Holding AS (OTC:TAVHF) over the past three years are starting to pay off.
The company is also making steady progress on its investment projects in Antalya and Ankara. The Antalya International Airport expansion project is 84% complete and expected to open in Q1 2025, while the Ankara airport development project is 58% finished and expected to be completed in Q4 2025. Antalya and Ankara airports have seen strong international passenger growth of 14% and 30%, respectively. The timely completion of these projects will help accommodate the rising demand for air travel in these regions.
TAV Havalimanlari Holding AS (OTC:TAVHF) has improved its earnings as a result of robust financial performance. The company’s EBITDA grew by 47% year-over-year, reaching EUR 215.4 million during the first half of 2024.
According to TAV Havalimanlari Holding AS (OTC:TAVHF) guidance for the full year 2024, the company expects revenue to fall within the range of EUR 1.50 – 1.57 billion, while EBITDA is projected to reach between EUR 430 – 490 million.
TAV Havalimanlari Holding AS (OTC:TAVHF) is one of the best airport stocks to buy according to analysts. 4 analysts have a buy rating on the stock. The median 12-month stock price target set by analysts for TAVHF is $10.26, which indicates a potential upside of 31.03% from current levels.
Overall TAVHF ranks 3rd among the best airport stocks to buy. While we acknowledge the potential of TAVHF as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TAVHF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.