Can Aena’s Stock Rally Continue After Strong Year and Latest Passenger Growth Figures?

If you are wrestling with what to do about Aena S.M.E stock right now, you have plenty of company. The shares have caught more than a few eyes recently thanks to a sharp rally since the start of the year, clocking a 23.2% gain year-to-date and an impressive 35.0% rise over the past twelve months. Even if you zoom out, the picture still looks strong, with the price up 138.2% in three years and 130.2% over five. Sure, there have been a few stumbles along the way. The stock dipped 3.0% over the last month, likely reflecting shifting market sentiment or consolidation after a rapid climb. Overall, the trajectory makes for compelling reading for any investor.

These kinds of moves have been driven in part by broader optimism in the sector, as well as stronger travel flows and infrastructure investments that are benefiting airport operators like Aena S.M.E. While market developments sometimes inject a bit of volatility, much of the long-term return story so far points to strong momentum and perhaps shifting perceptions of risk or opportunity.

But here is where things get interesting. When you dig into the company’s value score, Aena S.M.E is flagged as undervalued in just one of six typical valuation checks, giving it a modest score of 1. That number might give pause, especially if you are the sort of investor who prefers the odds stacked more in your favor.

Next, let’s walk through a few of the most common ways analysts approach valuation and see how Aena stacks up. And stay tuned, because there is an even smarter way to think about valuation that we will get to at the end.

Aena S.M.E scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Aena S.M.E Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model calculates a company’s intrinsic value by projecting its future cash flows and discounting them back to today’s value. This method attempts to estimate what Aena S.M.E is truly worth, based on its ability to generate cash in the future.

For Aena S.M.E, analysts report the company’s most recent Free Cash Flow (FCF) at €1.69 billion. Looking ahead, forecasts anticipate relatively stable inflows, with Free Cash Flow projected to reach €1.81 billion by 2028. While analysts provide estimates for up to five years, further 10-year projections have been extrapolated to reflect anticipated moderate growth over the long term.

Based on a 2 Stage Free Cash Flow to Equity model, the calculated intrinsic or “fair” value for Aena S.M.E is €15.07 per share. However, the DCF model suggests that the current share price is approximately 65.0% higher than this estimated fair value, implying the stock could be significantly overvalued relative to its cash-generating potential.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Aena S.M.E.

Our Discounted Cash Flow (DCF) analysis suggests Aena S.M.E may be overvalued by 65.0%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Aena S.M.E Price vs Earnings

For profitable companies like Aena S.M.E, analysts often look to the Price-to-Earnings (PE) ratio as a primary gauge of valuation. The PE ratio is popular because it compares a company’s current share price to its earnings, effectively telling you what investors are willing to pay for each euro of profit. A “normal” or “fair” PE depends on several factors. Higher anticipated growth or lower risks usually justify a higher PE, while slower growth or greater risk call for a lower figure.

Aena S.M.E is currently valued at 18.5x earnings. To put this in perspective, the average PE in the Infrastructure industry is just 15.1x, and Aena’s peer group trades at an even loftier 49.2x. While it stands above the industry average, it is clearly on the low end compared to close competitors.

This is where Simply Wall St’s "Fair Ratio" comes in. The Fair Ratio is a custom benchmark based on a mix of company-specific factors like Aena’s recent growth, profitability, and risk relative to its industry and market size. It offers a more holistic and tailored perspective, going beyond broad industry generalizations or peer group quirks. For Aena, the Fair Ratio is 16.8x, providing a precise estimate that takes all of these dynamics into account.

Comparing the current PE of 18.5x to the Fair Ratio of 16.8x, the gap is modest, suggesting that the stock’s valuation is only slightly above what would be expected given its characteristics. The difference is close enough that, for practical purposes, Aena appears fairly valued by this approach.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Aena S.M.E Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, structured way for you to express your unique view of a company by linking its story directly to numbers: your assumptions for fair value, future revenue, earnings, and margins. Narratives connect the dots between what is happening in the real world, a company's evolving prospects, and what that means for its fair value right now.

The beauty of Narratives is that they make these assumptions clear and dynamic, updating automatically when fresh news or earnings are released. Narratives are already being used by millions of investors on Simply Wall St's Community page, allowing you to see a range of perspectives and update your own quickly as conditions change.

This approach lets you compare your personal fair value against the current price, so you can decide not just if Aena S.M.E is cheap or expensive, but why, and whether it's the right time to buy or sell based on your beliefs. For example, some investors may build a Narrative around robust international passenger growth and forecast a bullish fair value of €28.9 per share; others may focus on regulatory risks and assign a more cautious value of €17.5. Narratives put you in control and turn complex financial analysis into an accessible, real-world decision-making tool.

Do you think there's more to the story for Aena S.M.E? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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