Fraport: Barclays reiterates 'underweight' rating

(CercleFinance.com) - Barclays Capital reiterates its "underweight" rating and target price of 65 euros for the Fraport stock, citing falling profit per passenger at the German airport operator.


The broker is concerned that despite Fraport's "buoyant" passenger growth over the past year, the momentum is coupled with low incremental profitability.

Growth is dragged by limited pricing power (flat tariffs), and increasing labour costs, says BarCap, meaning that Fraport's growth profile is becoming increasingly reliant on international investments, it adds.

However, these international investments are driving Fraport's free cash flow negative in 2018, and this will likely remain negative for some years to come, Barclays warns.

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