Buy Signal on Aéroports de Paris (ADP-FR)

We had an Enter Long Strategic signal on January 17, 2022, triggered by our system on Aéroport de Paris, ADP-FR, the French consession Company.

Our system also triggered a bullish Tactical signal on December 23, that suggest a bullish acceleration. ADP has a rather weak track record, with a Behavioral score of 1/10, therefore the bullish signal is to be considered as mainly Tactical.

ADP is a € 12.6 Bn market cap, and the second largest airport group in Europe. It specializes in the ownership and operation, in Ile-de-France, of 3 airports (Paris - Charles de Gaulle, Paris - Orly and Paris - Le Bourget), 10 aerodromes and a heliport (Paris Issy- Moulineaux). There is 4 main segments : 1/ Airport services (36% of revenues) including air traffic management, intermodal transport and terminal management, installation of airport infrastructure, passenger check-in and transfer, baggage handling, aircraft handling (cleaning, guidance, assistance with positioning and starting, loading and unloading of aircraft), etc. ; 2/ operation of commercial and service spaces (27%) consisting in stores, restaurants, banks, exchange offices, etc. ; 3/ Real Estate management (12%) of which rental of land and business real estate assets (shops, offices, hotels, logistics buildings, etc.); And 4/ other (25%), primarily management of international airports, airport engineering services, specialized telecommunications, etc.

ADP business has been dramatically impacted by the pandemic, with revenue down by 55% in 2020 versus 2019 coupled with a net loss of €1.2 Bn (versus a net profit of €588 millions in 2019). The recovery is on progress, and expected to accelerate in 2022 with a return to a net profit. The 2019 level could be reached again in 2024.

ADP is clearly a reopening play, and should benefits from the possible end of the pandemic after the Omicron wave. The normalization of the airline trafic is expected from H2-2022.

Short term catalyst : Reopening, rotation to « value ».

This signal looks consistent with the bullish momentum currently active on « reopening sectors ».