Euroxx initiates coverage of PPA with an Overweight rating and a target price (PT) of 67 euros per share, reflecting upside potential of 43%.
We like PPA because of the exclusive concession for Greece's largest port, which extends until 2052, while we expect that the implementation of the port's investment program during the 2026-30 period will be a key growth driver, the analysts note
As the projects are completed, we estimate that free cash flows will begin to accelerate from 2029, leading to a double-digit FCF yield (i.e. free cash flow will correspond to more than 10% of its market capitalization.) by 2031, while the dividend yield will remain around 4% throughout the duration of the investment plan, based on a conservative 55% payout assumption, and will nearly double by 2035.
Based on our estimates for 2027, PPA is trading at 9.3x EV/EBITDA, at a 20% discount to peers, which constitutes an attractive entry point for long-term investors, it continues.
The company is currently implementing the largest expansion program in its history, with investments reflecting growth opportunities.
PPA will enter a naturally adjacent new business sector, modern logistics storage facilities, with attractive financial characteristics and high profit margins.
We estimate that from 2029 the profits from completed projects will begin to be reflected in the results and free cash flows will increase sharply, heading toward a double-digit FCF yield.
Based on a conservative 55% payout assumption, we forecast a dividend yield of around 4% during the 2026-30 period, at the peak of the expansion investment plan, which will gradually double by 2035 as FCF accelerates.