Jefferies has upgraded Fraport, naming the airport operator its top pick among European peers and assigning a price target of €100. This upgrade from “hold” to “buy” is driven by a more stable regulatory outlook and improving cash flow. Fraport shares rose more than 2% following the announcement. The firm cited improvements across the business and the nearing completion of major capital projects.

Key capital expenditures are set to decline, projected to reach €870 million in 2026 from €1.13 billion in 2025. This supports a shift towards positive free cash flow. Jefferies estimates free cash flow will reach €203 million in 2026, rising substantially in subsequent years. The brokerage also highlighted the company's favorable free cash flow profile compared to other European airports.

Regulatory clarity through 2026, supported by a multi-year pricing agreement, further bolsters investor confidence. Moreover, Fraport's valuation has lagged behind improvements in cash generation, which Jefferies believes makes the stock a good value. Passenger volumes at Frankfurt airport, though still below 2019 levels, are projected to continue recovering.

The opening of Terminal 3 in Frankfurt will coincide with higher summer capacity. The report suggests Fraport's current valuation doesn't reflect the underlying positive trends. Investors will be watching how Fraport's free cash flow and traffic figures develop in the coming quarters and if the company can meet its financial projections. The upgrade reflects a positive outlook for the airport sector.