Sydney Airport (ASX:SYD) share price lower on traffic update: Is it time to buy?

The Sydney Airport Holdings Pty Ltd (ASX:SYD) share price is trading lower after the release of its August traffic update…
The post Sydney Airport (ASX:SYD) share price lower on traffic update: Is it time to buy? appeared first on Motley Fool Australia. –

Corporate travel jet flying into sunset

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is edging lower on Friday after the release of its latest traffic figures.

In morning trade the airport operator’s shares are down 0.5% to $5.49.

What did Sydney Airport announce?

It was another difficult month for Sydney Airport in August.

During the month, Australia’s largest airport welcomed just 129,000 passengers through its terminals. This was a reduction of 96.5% on the prior corresponding period.

It was also down notably month on month from 317,000 passengers during July.

A total of 39,000 international passengers passed through Sydney Airport in August, down 97.2% on the prior corresponding period. This was broadly in line with July’s figures.

Also falling sharply was its domestic passenger numbers, which were down 96.1% on the prior corresponding period to 91,000. This compares to 276,000 passengers in July.

Unfortunately, with border restrictions still largely in place around the country, management isn’t expecting a swift recovery in traffic.

It commented: “We expect the downturn in passenger traffic to persist until government travel restrictions are eased.”

Should you invest?

While times are hard now for Sydney Airport, a return to form will inevitably come in time.

So with the company’s liquidity looking more than sufficient to ride out the storm following its capital raising, I think it could be a good option for patient investors.

I’m not the only one that sees Sydney Airport as a buy. A note out of Morgans last month reveals that its analysts have an add rating and $6.56 price target.

This price target implies potential upside of 18% for its shares over the next 12 months excluding dividends. Though, I wouldn’t hold your breath on dividends being paid in the near term.

I suspect they will be suspended until trading conditions return to normal, which could be FY 2022.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Sydney Airport (ASX:SYD) share price lower on traffic update: Is it time to buy? appeared first on Motley Fool Australia.

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