Group 1: Company Performance - Grupo Aeroportuario del Centro Norte (OMAB) shares increased by 6% to close at $76.81, supported by high trading volume, contrasting with a 0.9% loss over the past four weeks [1] - The company reported an 11.8% increase in March passenger terminal traffic, contributing to the stock's recent gain [1] - The upcoming quarterly earnings are expected to be $1.23 per share, reflecting a year-over-year decrease of 0.8%, while revenues are projected at $217.32 million, an increase of 14.6% from the previous year [2] Group 2: Earnings Estimates and Market Trends - The consensus EPS estimate for Grupo Aeroportuario del Centro Norte has remained unchanged over the last 30 days, indicating a lack of upward momentum in earnings estimate revisions [3] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment [3] - In comparison, DHL Group Sponsored ADR (DHLGY) closed 8.9% higher at $39.45, but has seen a 21% decline over the past month, with an unchanged EPS estimate of $0.69 for the upcoming report, representing a 3% increase year-over-year [4]

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Financial Data and Key Metrics Changes - In Q4 2024, total passenger traffic increased by 4.6% compared to Q4 2023, with domestic traffic growing by 1.5% and international traffic surging by 26.4% [8][19][21] - For the full year 2024, domestic traffic declined by 3.5%, while international traffic increased by 15% compared to 2023 [9][10] - Adjusted EBITDA for Q4 2024 reached Ps.2.4 billion, with an adjusted EBITDA margin of 73.8% [36] - Consolidated net income for Q4 2024 was Ps.1.2 billion, a decrease of 5.9% compared to Q4 2023 [38] Business Line Data and Key Metrics Changes - Restaurant revenues grew by 22%, VIP lounge revenues increased by 51%, and parking revenues rose significantly, contributing to a record high commercial revenue per passenger of Ps.60 in 2024, a 17% increase from 2023 [11][14] - OMA Cargo business grew by 22% in 2024, driven by organizational changes aimed at improving efficiency and customer service [12] - Hotel services revenue increased by nearly 20% compared to 2023, while industrial service revenue grew by 61% for the full year [13][14] Market Data and Key Metrics Changes - The combination of operational restrictions at Mexico City Airport and limited aircraft availability reshaped traffic dynamics, leading to a shift in airline strategies towards international routes [6][7] - The demand for flights between Monterrey and Mexico City metropolitan area grew by 8.18% in 2024, despite overall domestic traffic decline [9] Company Strategy and Development Direction - The company is focusing on expanding its Monterrey Airport, with ongoing projects aimed at increasing passenger capacity to nearly 16 million annually by early 2026 [16][17] - The strategy includes enhancing international connectivity by launching new routes and strengthening the airport's position as a major hub in Northern Mexico [8][21] Management's Comments on Operating Environment and Future Outlook - Management noted a recovery in domestic capacity deployment by main carriers and expects mid-single-digit growth in passenger traffic for 2025 [43][44] - The company is optimistic about the development of Monterrey's route network and sees potential for further growth in international traffic [44][68] Other Important Information - All 13 OMA airports achieved Level 3 Optimization Certification on the Airport Carbon Accreditation Program, highlighting the company's commitment to sustainable airport management [27] - The concession tax increased by 97% to Ps.265 million due to a rate hike, impacting financial results [34] Q&A Session Summary Question: Traffic outlook for this year and Monterrey's route network development - Management expects mid-single-digit growth in passenger traffic for 2025, with opportunities to further develop Monterrey as a connecting hub [43][44] Question: MDP expectations and CapEx ramp-up - Management is working on an optimized CapEx plan to maximize net present value without putting unnecessary pressure on tariffs [45] Question: Timing for MDP announcement and cost pressures - The MDP plan will be presented by the end of June, with expectations of inflationary cost increases in 2025 [59][60] Question: Interest expense increase and future expectations - The increase in interest expense is related to adjustments in the major maintenance provision, which is sensitive to interest rate variations [72][73] Question: Traffic guidance for Monterrey - Monterrey is expected to drive growth, with traffic projections incorporating some macroeconomic volatility [94] Question: Strategy behind short-term loan - The short-term loan was aimed at strengthening working capital and is expected to be refinanced with long-term debt [112]

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Core Viewpoint - Grupo Aeroportuario del Centro Norte S.A.B. de C.V. (OMAB) shows potential as a stock pick due to a recent "golden cross" event, indicating a bullish trend [1][2]. Technical Analysis - A "golden cross" occurs when a stock's short-term moving average (50-day) crosses above its long-term moving average (200-day), suggesting a bullish breakout [2]. - The successful golden cross event consists of three stages: a price decline bottoming out, the shorter moving average crossing above the longer one, and maintaining upward momentum [3]. Stock Performance - OMAB shares have increased by 13% over the past four weeks, indicating positive momentum [4]. - The company currently holds a 2 (Buy) rating on the Zacks Rank, suggesting it may be poised for further breakout [4]. Earnings Expectations - Recent earnings expectations for OMAB show one upward revision and no downward changes in the last 60 days, with the Zacks Consensus Estimate also moving higher [4]. - Positive earnings estimate revisions further support the bullish outlook for OMAB [5].

If you want full access to all our reports, data and investing ideas, join The Aerospace Forum , the #1 aerospace, defense and airline investment research service on Seeking Alpha, with access to evoX Data Analytics, our in-house developed data analytics platform.In August, I reiterated my buy rating for Grupo Aeroportuario del Centro Norte (NASDAQ: OMAB ). Since then, the stock has gained 3.2% but continued to underperform the stock market, which gained 4.5%. On the 25th of October, the company reported it ...

Financial Data and Key Metrics Changes - In Q2 2024, total passenger traffic reached 6.5 million, a decrease of 2.4% compared to the same quarter last year [13] - Adjusted EBITDA was MXN2.2 billion with an adjusted margin of 73.3%, while total aeronautical and non-aeronautical revenues grew 1.1% to MXN2.9 billion [20][23] - Consolidated net income increased by 1.5% to MXN1.3 billion compared to Q2 2023 [40] Business Line Data and Key Metrics Changes - Aeronautical revenues decreased by 2.5%, primarily due to a 4.3% decline in domestic passenger traffic, partially offset by a 12.4% growth in international passenger traffic [36][90] - Non-aeronautical revenues increased by 13.8%, driven by VIP Lounges, Parking, and Restaurants [20][31] - Commercial revenues grew by 11.9%, with significant contributions from VIP Lounges and Parking [20][31] Market Data and Key Metrics Changes - International passenger traffic increased by 12% compared to Q2 2023, with Monterrey airport showing significant growth on routes to Atlanta, Las Vegas, Toronto, and Orlando [7][8] - The occupancy rate of commercial space stood at 95.3% at the end of the quarter [32] Company Strategy and Development Direction - The company is focusing on expanding its airport as a key logistics hub, with plans to increase cargo warehouse capacity by nearly 50% [16] - OMA is actively working on expanding and remodeling terminal buildings across several airports, reflecting a commitment to enhancing facilities and services [18] Management Comments on Operating Environment and Future Outlook - Management noted that the Pratt & Whitney engine recall affected traffic, particularly on routes like Monterrey to Cancun, but expects a quick recovery as the issue fades [5][30] - The company anticipates a low-single-digit decrease in traffic for the second half of the year due to the ongoing effects of the Pratt & Whitney issue [58] Other Important Information - The concession tax increased by 71% to MXN239.3 million due to a rate increase from 5% to 9% on revenues generated by airport concessions [21] - Cash generated from operating activities in Q2 amounted to MXN1 billion, with total debt at MXN10.9 billion and a net debt to adjusted EBITDA ratio of one times [93] Q&A Session Summary Question: Expectations for traffic in the second half of the year - Management expects a low-single-digit decrease in traffic due to the Pratt & Whitney issue [58] Question: Reason for traffic decline on the Monterrey-Cancun route - The decline was primarily due to reduced capacity by some carriers operating that route, which was significantly affected by the Pratt & Whitney issue [30] Question: Impact of international passengers on commercial revenues - The increase in commercial revenues is attributed to overall strategy rather than solely international passenger growth [78] Question: Compliance with maximum tariff - The company is close to 99.3% compliance with maximum tariff at this point [69] Question: Plans for international expansion - The company is always looking for international expansion opportunities but is not currently involved in any tender bidding processes [66]

Stocks with meaningful exposure to Mexican federal government policy have yet to recover from their post-election selloffs, but I do think there could be some bargains in the mix now, and that includes Grupo Aeroportuario del Centro Norte (NASDAQ:OMAB) ("OMA"), the operator of 13 airports in Mexico, including the airports in Monterrey, Culiacan, Chihuahua, and Ciudad Juarez. While there are valid concerns about government policy towards concession operators now, not to mention concerns about near-term traff ...

Guide to Identifying Oversold Stocks Grupo Aeroportuario del Centro Norte (OMAB) has been beaten down lately with too much selling pressure. While the stock has lost 16.7% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier. We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is ...

Revenue Sources and Regulations - In 2021, 2022, and 2023, approximately 60.5%, 59.1%, and 61.8% of the Company's total revenues were derived from aeronautical services, which are subject to price regulation[13] - The maximum rates applicable to the Company's airports reflect an annual efficiency improvement of 0.70% for the five-year period ending December 31, 2025[14] - In 2023, revenues subject to maximum rate regulation represented approximately 97.5% of the amounts the Company was entitled to earn under the maximum rates for all its airports[33] - The Company aims to charge prices as close as possible to its maximum chargeable rates, with adjustments allowed only once every six months for inflation[37] - The regulations governing maximum rates do not guarantee profitability for the Company's airports or expected returns on investment[24] - The Company may face sanctions if it exceeds the maximum rate at any airport, which could lead to termination of concessions if violations occur more than twice within a 10-year period[35] - The Company cannot predict the impact of potential future amendments to the tariff base regulation, which may affect maximum rates and overall financial performance[16] Government and Regulatory Risks - The Mexican government may terminate or reacquire the Company's concessions under various circumstances, which could materially affect its operations[39] - The Mexican government has recently awarded several airport concessions to state-owned companies, consolidating military presence as an airport operator overseeing 20 airports, including major ones like Mexico City International Airport[45] - The Mexican government increased the fee paid by airport concessionaires from 5% to 9%, which will affect revenues starting in 2024[64] - The Mexican Supreme Court has declared amendments to the Electric Industry Law unconstitutional, which may affect the regulatory environment in which the Company operates[58] - The Mexican National Water Commission has the authority to restrict water use at some airports, and non-compliance could lead to significant fines or cancellation of water extraction rights[195] Economic and Market Conditions - The peso appreciated by approximately 13.3% from Ps.19.50 per U.S.$1.00 on December 31, 2022, to Ps.16.90 per U.S.$1.00 on December 31, 2023[38] - The Mexican economy achieved real GDP growth rates of 3.1% in 2023, 3.1% in 2022, and 5.0% in 2021, with an estimated growth of 2.7% in 2024 and 1.5% in 2025[165] - The company is significantly dependent on the performance of the U.S. economy, as a downturn could materially affect its results of operations[87] - Economic conditions in Mexico are increasingly correlated with those in the United States, indicating that a downturn in the U.S. could adversely impact the Mexican economy[190] Competition and Market Dynamics - A new airport in Bocoyna, Chihuahua, has started operations with an annual capacity of up to 20,000 passengers, expected to increase to 80,000 in the first five years and 250,000 thereafter, potentially competing with the Company's airport[44] - The Company may face competition from Aeropuerto del Norte, which is expected to expand its commercial aviation operations under a new concession granted to the Ministry of National Defense[46] - Increased competition from other tourist destinations could adversely affect passenger volumes and, consequently, revenues[104] - In 2023, VivaAerobus accounted for 38.7% of total aeronautical revenues, followed by Volaris at 23.5% and Aeroméxico at 19.9%[114] Operational Challenges - The Company’s concessions are its principal assets, and losing any concession would have a significant adverse effect on its business and results of operations[42] - The operational disruptions due to the dependency on a single commercial runway at several airports could materially affect business and financial results[142] - The company is exposed to risks related to construction delays and budget overruns that could limit airport capacity expansion and adversely affect financial performance[144] - The company may incur increased costs if required to monitor aircraft movements at its airports, which could negatively impact its results of operations[49] Labor and Compliance Issues - The Company has complied with new labor laws that protect workers' rights, but increased demands from unionized workers could lead to higher labor costs[52] - Collective labor conflicts in Mexico have led to a 20.0% increase in the general minimum wage applicable as of January 1, 2024, which may increase personnel costs[122] - The company is required to comply with anti-money laundering regulations, and failure to do so could result in fines and reputational damage[160] Environmental and Natural Disaster Risks - The increasing frequency of natural disasters due to climate change poses a significant risk to the company's operations and financial condition[140] - The company has insurance for physical facilities at airports against natural disasters, but lacks coverage for business interruption losses, which could lead to significant financial impacts[139] - The presence of protected mangrove species at Acapulco and Zihuatanejo airports may restrict expansion opportunities[193] - Environmental legislation in Mexico, including a carbon dioxide market initiated in 2018, could limit airport growth and impose additional reporting requirements[192] Financial Performance and Taxation - Changes to Mexican tax laws could impose significantly higher income tax obligations on the Company, adversely impacting its results of operations[50] - Net deferred tax assets amounted to approximately Ps.809,700 thousand as of December 31, 2023, subject to changes in tax laws or accounting standards[133] - As of December 31, 2023, 31.2% of the company's long-term debt has interest payments at a variable rate, exposing it to risks from market interest rate fluctuations[166] External Factors and Geopolitical Risks - The ongoing military conflict in Ukraine has caused significant volatility in commodity prices, which may adversely affect the company's operations[69] - The travel warning issued by the U.S. Department of State on August 22, 2023, urges U.S. citizens not to travel to several Mexican states, which could negatively impact passenger traffic[184] - The arrest of a major drug cartel leader in January 2023 led to the cancellation of 163 air traffic movements at Culiacán and Mazatlán airports, highlighting operational risks[188] - The company is exposed to potential adverse effects from rising crime rates in Mexico, which could decrease passenger traffic and increase security costs[184] - Political conditions in Mexico, including upcoming elections in June 2024, could materially affect the economic environment and the company's operations[170] Technological and Cybersecurity Risks - The company faces risks from cybersecurity threats, having previously experienced a ransomware attack in 2021, which was mitigated with backup processes[109] - The company has invested in new baggage screening technology, with a replacement of existing equipment expected to continue through 2025, which may incur significant capital expenditures[101] Strategic Initiatives and Future Outlook - The company may consider international expansion opportunities, which could involve significant capital expenditures and exposure to various risks[162] - The company’s diversification projects, including hotels and industrial parks, are highly dependent on passenger traffic, which may be affected by external factors beyond its control[111]