The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is flat in early afternoon trading, after being down almost 1% in earlier trading. This comes after Sydney Airport's shareholders enjoyed a 3.1% gain over the course of last week.
After shares plunged more than 48% earlier in the year, driven by the wider COVID-19 market panic, Sydney Airport's share price has choppily moved higher, regaining 30% from the March lows.
But with investors still focused on the near-term travel restrictions that have gutted international and domestic air travel, the share price remains down 32% from 17 January.
What does Sydney Airport do?
Sydney Airport Holdings owns a 100% interest in Sydney Airport, offering an international gateway connecting to more than 90 other airports around the world.
Headquartered in Sydney, the company provides aeronautical, retail, property, car rental, and parking and ground transport services through its 2 main business units: Aviation (Sydney Airport) and Leasing & Advertising Opportunities.
Sydney Airport shares began trading on the ASX in 2002. Today it's part of the S&P/ASX 200 Index (ASX: XJO).
What next for the Sydney Airport share price?
In intraday trading, Sydney Airport's share price is flat. That's despite receiving the thumbs up from Morgan Stanley this morning.
Citing the potential benefits of capital expenditure tax write-offs and its belief that more air travel routes will open over the coming 12 months, the broker upgraded Sydney Airport shares from equal-weight to over-weight. Its new price target of $6.67 per share represents an 11% upside from the current price of $6.02 per share.
I believe Morgan Stanley's analysts have this one right, though if anything they may be being a bit conservative.
While the European and American continents look likely to remain no fly zones for the next 12 months as their respective nations struggle to contain the coronavirus, the likelihood of expanded air travel bubbles is looking up.
Domestic air travel will be the first to recover, assuming Australia's virus cases continue to head towards zero. The New Zealand travel bubble will most likely follow, with negotiations between the two governments on the finer details continuing.
And over the weekend Prime Minister Scott Morrison added the Pacific island nations, Japan, South Korea and Singapore to the list of nations Australians may be able to fly to (and whose citizens may be able to fly here) within the coming months.
Speaking in Queensland, Morrison said he'd "had a number of discussions with Pacific leaders this week." He also noted there had been discussion with Japan's and South Korea's leaders and that, "The Foreign Minister, this week, has been talking to the Prime Minister of Singapore."
These may be baby steps towards the full reutilisation of Sydney Airport's facilities. But it's a good indication that patient investors could again see the Sydney Airport share price trading at January's $8.81, a gain of 46% from the current price.
