Grupo Aeroportuario del Pacífico (GAP) is a leading airport operator in Mexico, managing 12 airports including Guadalajara, Tijuana, and Puerto Vallarta. The company has demonstrated a strong recovery in passenger traffic post-pandemic, with volumes exceeding pre-COVID levels in 2023 and continuing to grow in 2024. GAP benefits from structural tailwinds including nearshoring, which drives business travel and cargo demand, and a growing middle class in Mexico increasing leisure travel.
Financially, GAP has a robust balance sheet with manageable debt and strong free cash flow generation. The company recently secured a 5-year extension on its master concession agreement, providing regulatory visibility until 2048. Valuation is reasonable, with an EV/EBITDA of around 10x, below historical averages, offering upside as earnings grow.
Key catalysts over the next 12 months include: (1) continued passenger traffic growth, particularly international routes; (2) potential tariff increases approved by the regulator; (3) expansion of non-aeronautical revenues (retail, parking, real estate); and (4) potential share buybacks or special dividends given strong cash flow.
Risks include regulatory changes in Mexico’s airport sector, potential slowdown in nearshoring due to US policy shifts, and currency exposure (MXN volatility). However, GAP’s diversified airport portfolio and essential infrastructure status mitigate these risks.
Disclaimer: This is not financial advice. Investing involves risk, including potential loss of principal. Past performance does not guarantee future results. Conduct your own research or consult a financial advisor before investing.