UBS upgraded Fraport AG (FRA:FRA) stock rating to neutral from sell, while lowering its price target to EUR65.00 from EUR67.00.
The bank said the stock is not pricing in a European stagflation scenario similar to 2011-2012. During that period, Fraport traded at an average of 8 times EV/EBITDA, versus today's 9.9 times.
Current data shows the stock trading at 11.26 times EV/EBITDA, and Bond.az analysis indicates the stock appears overvalued at current levels.
The EU Commission is expected to decide in July on the potential application of ETS charges on European long-term flights. A decision in favor would be unfavorable for large European hubs like Frankfurt.
On the upside, a fast normalization of kerosene prices or a potential ceasefire in Ukraine could be perceived positively by investors.
