Morningstar - Sydney Airport (SYD) Morningstar | Despite Slowing Top-Line Growth, Sydney Airports Narrow Moat Remains Intact

Report

Morningstar

Adam Fleck

EUR 850.00 For Business Accounts Only

Morningstar | Despite Slowing Top-Line Growth, Sydney Airport's Narrow Moat Remains Intact

Sydney Airport enjoys strong competitive advantages, stemming from its position as the only airport in Sydney capable of handling international aircraft. The airport, under lease through 2097, is Australia's busiest and currently the only regular passenger transport airport in Sydney. It has strong operating leverage and it is currently benefiting from low interest rates and minimal tax bill. This combination is reflected in our more than 4% per year distribution growth forecast through 2021. That said, longer-term interest rates will inevitably revert to more normal levels, and by 2022, we estimate that Sydney Airport will start paying tax. Furthermore, the second airport in Sydney is set to be operating by 2026, which may prove dilutive to current returns. As such, we estimate distribution growth will slow, ultimately growing at about 3.4% over the next 10 years.

21/02/2019 23 EN

Underlying

Sydney Airport

Sydney Airport's principal activity is the ownership of Sydney Airport.

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AU000000SYD9 Australian Securities Exchange Australia

Provider

Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

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Analysts

Adam Fleck

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Morningstar | Despite Slowing Top-Line Growth, Sydney Airport's Narrow Moat Remains Intact

SYDNEY AIRPORT is slightly downgraded to Slightly Positive due to an increasingly adverse environment

Monthly LMI Update Independent Investment Research

Sydney Airport: 1 director maiden bought

Business as Usual for No-Moat Lonza; Specialty Ingredients Carve-Out on Track for 2020

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

Astra Posts Solid 2Q, Driven by Strong Cancer Drug Sales and Moving Away From One-Time Divestments

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