Macquarie Airports (MAP) Share Trading Recommendation

Submitted by Craig Strzelecki on 28 February, 2007 - 06:24

Macquarie Airports (MAP) have a Neutral 2 share trading recommendation and a price target of $3.71 per share from analyst UBS. MAP have released their FY06 results of an NPAT of $600m against UBS estimates of $277m. As always, key point of difference was revaluation revenue (which is non-cash & very difficult to predict). Proportionately consolidated EBITDA +8.7% over the pcp which highlights the strong performance of the portfolio. MAP Net Asset Value (NAV) moves to $3.93 (+10.4%). In their view competition in the airport space is aggressive, and given MAP's discipline so far, we believe the problem is more likely going to be what to do with the cash coming back into the portfolio net of already identified outgoings (eg 15.1% increase in Sydney in March 07, and the FY07 equity distributions).Management expect proportionately consolidated cash flow to converge with distributions around FY10. They have revised our distribution forecasts for FY07 & FY08 to 26cents per share & 27 cents per share. The sector trend appears to be in favour of increasing operating cash flow coverage of distributions (we expect upside risk over the longer term). UBS has a valuation of $3.43 based on December 2006 DCF. In the analysts' view MAP looks fairly priced, although remains an attractive long-term exposure with attractive yield (underpinned by a quality portfolio with strong growth), capital management optionality and strong management, albeit with greater risk.

Macquarie Airports Limited is listed on the Australian Stock Exchange (ASX) under stock code MAP. You can view their investor website here. MAP was listed on the ASX on 2 April, 2002. Kerrie Mather is the CEO and Max Moore-Wilton the Chairman for Macquarie Airports. MAp is listed on the Australian Stock Exchange, and their objective is to invest in a portfolio of ports. In its IPO prospectus, MAp stated its intention to acquire significant shareholdings which provide influence over the key strategic, commercial and financial decisions affecting its investments. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade MAP. Check your charts and good luck with your share trading!

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