All of the Mexican airport operators have done well over the last six months or so, boosted by optimism on COVID-19 vaccines, a path back towards traffic normalization, and a surprisingly accommodating Mexican government. Of the three, Grupo Aeroportuario del Pacifico (PAC) (or “GAP”), has been the relative laggard since my last update on the company but has still done alright, rising about 36% versus 40% for Grupo Aeroportuario del Centro Norte (OMAB) and over 55% for Grupo Aeroportuario del Sureste (ASR) and around 28% for the S&P 500.
Surprisingly strong traffic in March doesn’t hurt the GAP bull case, nor does the surprisingly accommodating new Master Development Plan (or MDP). With healthy leverage to Volaris (VLRS) and domestic leisure travel, GAP could well exceed some of its own targets for traffic renormalization, though international travel remains a weak spot and is likely to remain so for a while longer.
While the healthy move in the share price does take some of the easy money off the table, I don’t think GAP is overpriced yet, nor priced beyond a point where investors can expect a reasonable return. Long-term annualized returns in the high single-digits may not seem so exciting at this point, but relative to a lot of other options, I think this airport operator still has some appeal.
Click the link to continue:
Grupo Aeroportuario Del Pacifico Still Offers Reasonable Potential As Domestic Travel Recovers
No comments:
Post a Comment