MAP

Macquarie Airports (MAP) has a reiterated BUY rating with a trimmed down target price of $3.67 from Australian stockmarket analysts from Citi.

Macquarie Airports (MAP): Buy Straw Hats in Winter

Babcock & Brown (BNB) has a $25.00 share price target from Australian stockmarket analysts from Citi.

Babcock & Brown (BNB) Reputation damage

BBP refinancing shortfall and "mis-communication":

Here is an update on the Australian infrastructure sector provided by Australian market analyst UBS.

Australian Infrastructure

Return to fundamentals on the horizon

Infrastructure & long-duration interest rate relationship broken...for now:

Macquarie Airports has a retained Hold broker call and a share price target of $4.21 from sharemarket analyst Citigroup Investment Research. Rome Airport has reported 1Q07 EBITDA of €51.7m, which was 5% below pcp and 2% below the analyst's estimated number of €52.8m.The decline was due to the sale of its Handling operations and reduction in night flight surcharge in 2H06. Operating costs have increased as the number of consultants advising on Aeronatical framework has risen. MAP's Attack On Operational Costs: Although total operating costs declined 8% over pcp, MAP noted a 10% lift in expenses excluding the benefit of the sale of Handling business. The analyst views the comments as a negotiation tactic to create urgency in the negotiations and potentially influence – most likely down – the valuation of Rome Airport. Given growing demand for infrastructure assets globally, the analysts do not rule out the Macquarie Bank group of shareholders (including MAP's 34% stake) to buy out a controlling stake in Rome Airport. MBL might take advantage of 'tension' between Gemina's various shareholders and its limited funding options. Although it may require some convincing on the merits of acquiring a controlling stake in an asset which has uncertain regulatory framework and a financially distressed airline as its main customer, the acquisition is likely to be accretive on valuation grounds (15x v/s MAP's 17x EV/ EBITDA). The protracted nature of negotiations between the shareholders of Rome Airport mean that Macquarie Airports (MAP) should be able to fund its share of contributions from the sale of its interest in Birmingham Airport, the refinancing of Brussels and Copenhagen airports later in the year.

Macquarie Airports (MAP) has a maintained Hold/High Risk broker call and a share price target of $4.21 from sharemarket analyst Citigroup Investment Research. Strong Result from Brussels: Hot on the heels of a solid result from Sydney Airport, Brussels Airport has reported a pleasing 12.6% EBITDA growth in 1Q07 to €36.3m –7.4% higher than the analyst's estimate of €33.8m. As it is early in the year and due to unforeseen events such as management's goodwill gesture of free landing and take-off every Friday in May after a strike on 13 April, the anlayst retains its FY07e EBITDA of €188m. Consequently, there is no change to the analyst's earnings estimates. Operating Leverage Evident: Strong result was driven by 4.4% growth in revenues and 4.4% reduction in operating costs (excluding security costs). Aero, Retail and Car Parking revenue grew between 5-8% – well above passenger growth rates of 3.8%. However, Property revenue declined 2.8% due to a loss of a customer lease with an offsetting lower utility cost. Key Focus on Property Development: The Board recently approved an €18m, 10,000 metres squared development for Phase-1 of Brucargo West project (Logistics development). All up 800,000–1,000,000m² of land has been earmarked for the development. Separately, there is a five-phase, 15-year program to develop Airport Village. Phase-1 of that project is expected to complete in c2010. Refinancing Should Net 20 cents per share: With the recent lift in bond yields in Europe, and the collapse of Sabena following 9/11 still in the minds of lenders, the analyst conservatively estimate the re-gearing of Brussels Airport at 7x EBITDA – yielding c$350m or 20cps to MAP in the next few months. Target Price of $4.21 Offers ETR of 15%: Near-term catalysts are the sale of MAP's interest in Birmingham and Rome airports and refinancings at Brussels and Copenhagen airports.