Flughafen Wien confirmed at HOLD, TP EUR 40.0 - Another solid year ahead

We reiterate our HOLD recommendation for the shares of Flughafen Wien setting a TP of EUR 40.0 (down from EUR 42.0). Although the FY 20e guidance released at the end of January triggered a hike of our estimates by 4-5% and the relative valuation of the share shows a widening of its price discount vs. peers, we remain neutral on the investment case for the moment. As already outlined in the past we expect the momentum of the main share price drivers of the recent past to flatten out in the next quarters due to the following factors: 1) soaring passenger growth (plus 30% in the last two years), 2) substantial margin improvement (the clean EBITDA margin has increased by roughly 11%p since 2011) and 3) significant net debt reduction (Net debt/EBITDA fell from 4.0x in 2011 to 0.4x in FY 19e, RCB definition). Hence, the growth rates of earnings and cash flows are likely to slow down which, however, should be of limited surprise given the stellar financial performance of the last few years and the communicated investment initiatives. The company is going to present its FY 19 results on March 2, but as traffic figures and guidance for FY 20e were already released, we see the release less of a market-driving event. An update on the long-term capex guidance (FY 19-28e EUR 2.5 bn) and the effects from the Coronavirus (cancelled Chinese routes, reduction of traffic, effect on retail spending mix, additional health checks at the airport) could be in focus.