In afternoon trade the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is on course to finish the day in the red.
At the time of writing the airport operator's shares are down almost 2% to $7.33.
Why is the Sydney Airport share price sliding lower?
With no news out of the company, I suspect that today's decline could be attributable to a broker note release this morning from Deutsche Bank.
According to the note, analysts at the investment bank have downgraded Sydney Airport's shares from a buy rating to hold. The broker has also trimmed the price target on the company's shares by just over 3% to $7.50.
Deutsche made the move after the Sydney Airport share price rose strongly in 2019. Prior to today the company's shares were up 11% since the start of the year and 16% from its January low of $6.41 thanks to bond yield movements, solid passenger growth, and the favourable draft report from the Productivity Commission.
For those that missed the latter, in February the Productivity Commission stated that airports have not systematically exercised market power and existing regulations benefit the community.
So, with Sydney Airport's shares pushing notably higher this year, Deutsche believes they are close to peaking and likely to underperform in the near term. Especially in the coming period where the airport cycles strong international passenger growth from last year.
What now?
Whilst I think that Deutsche Bank makes some great points on Sydney Airport, I would still be a buyer of its shares with a long-term view.
Thanks to the tourism boom and its position as the main gateway into and out of Australia, I believe it is well-positioned to grow its earnings and dividend at a steady rate over the next decade.
This could make it worth considering a patient investment in its shares along with fellow dividend stars National Storage REIT (ASX: NSR) and Rural Funds Group (ASX: RFF).
