Investing.com -- Shares of Aéroports de Paris (EPA:ADP) rose on Tuesday following a revision by analysts at BofA Securities, who upgraded the stock to “buy” from “neutral.”
At 6:30 am (11:30 GMT), Aéroports de Paris was trading 2.6% higher at €107.6.
The upgrade was accompanied by an increased price target, moving to €155 from €128, signaling a potential upside of about 50%.
The analysts at BofA said ADP’s promising structural positioning despite a challenging year marked by underperformance relative to European airport peers such as AENA and Flughafen (VIE:VIEV) Zurich.
Much of this lag was due to political and fiscal pressures in France, including tax hikes. However, they view ADP as a leader in key markets—France, India, and Türkiye—and highlighted several catalysts that could drive growth.
These include anticipated tariff hikes for 2025, expected acceleration in traffic, and higher retail spending targets.
Traffic growth projections remain robust, particularly for long-haul routes, with a forecast of 3% growth in Paris for 2025, supported by strong demand from North America and potential recovery in Asian markets.
ADP's retail business is also performing above expectations, with analysts predicting an increase in revenue per passenger spend by 3-4% for 2025.
BofA also pointed to ADP's strategic international investments, notably in India and Türkiye, as underappreciated assets.
The valuation of ADP's stakes in GMR and TAV has increased, underscoring the long-term value in emerging markets.
These factors, combined with potential regulatory approvals for tariff increases, suggest a favorable trajectory for ADP’s financial performance.
The note mentioned improved earnings forecasts, with 2025 EPS expected to rise by nearly 17.9% to €6.85, reflecting both operational efficiencies and strategic positioning.
BofA analysts believe these elements support the case for ADP's stock recovery and underscore its investment appeal.