Fraport (ISIN: DE0005773303) – An essential Infrastructure play geared up to “fly away” ?

Posted on by 8 comments

This is an investment idea that I have “borrowed” from my friend Jonathan Neuscheler from Abilitato. Therefore I highly recommend to read what he has written first. And this is also the reason why this write-up is rather short.

In short, I think Fraport is an interesting turn-around/deleveraging story with a near term catalyst in form of the resintatement of the dividend in 2026. Relative to its peers, Fraport trades at a significant discount which could disappear if things go according to plan which adds to the potential upside.

Here is the write-up (don’t worry, only 9 pages incl. pictures):

Fraport-1Download

Bonus track: Lennis Kravitz – Fly away

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8 comments

  • Winter
    10. June 2025 20:23

    I cannot understand why you fall for this. As I pointed out on another occasion, Fraport does not trade on a discount, neither relative to peers, nor relative to its own history, if you include the debt (EV), that is EV/EBIT or EV/EBITDA which are both ABOVE historical norms. P/E is an unlevered multiple that is questionable when the debt level has changed significantly (and maybe even P/B). If you look at the EV chart: It’s at an all time high, nothing contrarian here.
    Also, you normally don’t like the involvement of the state.
    To me, the reinstatement of the dividend would only be a catalyst if the valuation was actually cheaper than other airports, or if it was a small cap, or if you expect the dividend yield to be very high (maybe >5%). So in the end, it’s only the hope of operating improvements – which even has to realize partially just in order to be in line with average historical valuations and which surely justifies some scepticism with regard to “Germany” “(Berlin”).
    I’m not saying that infrastructure assets aren’t generally interesting. They are one of the most “AI proof” investments I can imagine. But especially after the price run up, this does not look particularly apealing to me. Eurokai is very different.

    Reply
  • Oriental Speculator
    3. June 2025 11:26

    I like the dividend resumption story, this is definitely a bit of an orphan

    Also if they do 60% payout (which is industry standard) this is quite positive for the name, given it was previously 40%
    I would think about it on anywhere between a 2-3.0% dividend yield no?

    Interesting on ground handling – this is a dog of a business, if they can make it less of a dog then that is positive too for profitability

    Also interesting on T2 – one of the reasons for lower profitability is the layout of T2 means the lux brands are less keen to put stores into FRA vs say ADP as it doesn’t fit the ‘look’ they are after

    Granted this is a long term fix but good to see they are addressing that

    If they can get proper concession revenue out of this then that is very profitable (ADP and AENA is usually 30-40% revenue share post security)

    I’m not sure I would be wildly positive about international growth, historically most operators I don’t think have added lots of value by expanding geographically

    Shareholder structure – I kind of feel is par for the course in these assets

    I would expect some teething issues for T3 when it opens – just how this works, these are big complex and highly regulated assets with a focus on security and safety, turning it on and expecting to run perfectly on day one is unrealistic. Pretty much everyone trips up in year one – see HKG etc

    Reply
  • Mr. Gorillaz
    1. June 2025 05:43

    I liked the podcast you cited but has chris hoghs invested in airports? Comparatively to the other airports you mentioned, I agree that it does not look bad and I like your analysis. Brussels airport is valued at 10 billion currently, but only our government wants that price for it 😉

    Reply
  • Roger
    31. May 2025 23:00

    Danke für die Vorstellung des Unternehmens!
    Klingt sehr spannend!
    Ein weiteren potentiellen Trigger für die Aktie hast du m.E. vergessen: Sofern es (wie ich es einschätze) derzeit zu einem steigenden Interesse der Märkte für Eurpäische Aktien anstelle von Trumpschen US-Aktien kommt (europäische “Rückkehrer” ebenso wie Amis, die nach stabileren, Taco-freien Anlagemöglichkeiten suchen), sollte Frankfurt Airport zu einem guten Ziel werden: Zuverlässig, solide, verständlich. Als MDAX-Wert für Institutionelle ausreichend groß, um ein paar Gelder hineinstecken zu können. Und eine Dividende ist auch in Sicht.
    Aus Eigeninteresse hoffe ich, dass die klassische Sommerpause den Wert noch ausbremst, bis ich genug Free Cash zum Investieren habe, aber ab dem Herbst sollte es interessant werden.

    Reply
  • superblyfa3d201deb
    27. May 2025 19:51

    Are you not worried about the potential impact of tariffs by the USA on freight shipments out of Frankfurt to the USA? Furthermore, the current hostile travel stance of the US towards new arrivals has led to a decline in tourism there.

    A quick research by me found that 20% of freight is going to or coming from the USA out of Frankfurt…

    source: Fraport air traffic statistics 2023 report

    Reply
    • memyselfandi007
      28. May 2025 06:48

      Good question, however who knows how that whole Tariff crazyness ends ? Yes, Fraport might have some exposure but maybe less than the German economy as a whole. And German stocks are higher than the were before Friday.

      Reply
      • Roger
        31. May 2025 23:10

        You know, Taco-Trump howls like a lion, but soon afterwards always chickens out.
        Like he pinched toward China he will do as well toward Europe.
        Or the courts will do him pinch out. Such a pathetic loser, its a shame.

        And if not – the crazier Trump acts, the more International and American investors will look for more stable grounds and invest in Good Old Europe, buying Fraport.

        So Trump is a real win-win for Fraport. 🙂

        Reply

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