Prime Minister Ali Falih al-Zaidi’s cancellation of the US$764 million Baghdad International Airport expansion contract involving Corporación América Airports (CAAP) on corruption and fraud grounds draws fresh attention to the stock’s airport concession risk profile.

Against the backdrop of the Baghdad contract cancellation, Corporación América Airports’ share price has been volatile in the short term, falling 1.0% over the last day but rising 7.9% over the past week and 16.4% across 30 days. Its 1 year and 5 year total shareholder returns of 44.3% and over 4x respectively indicate that performance has been stronger over longer periods than in recent months.

If this kind of airport concession risk has you thinking about diversification, it could be a good moment to scan other infrastructure linked opportunities through 34 power grid technology and infrastructure stocks

So with Corporación América Airports stock trading at US$27.78, with an indicated 67% intrinsic discount and a 17% gap to analyst targets, are you looking at a genuine mispricing, or at a market that already factors in future growth?

Most Popular Narrative: 13.2% Undervalued

With Corporación América Airports stock at $27.78 against a most widely followed fair value of $32, the valuation story leans toward upside and puts its traffic and earnings profile in focus.

Robust and accelerating passenger growth across key markets, particularly Argentina, Brazil, Italy, and Armenia, reflects the long-term global trend of increased air travel demand, especially in emerging markets. This is expected to drive sustained revenue and EBITDA growth going forward.

Want to understand why this narrative supports a higher fair value for Corporación América Airports? The core assumptions hinge on steady revenue expansion, thicker margins and a future earnings multiple that still sits below many infrastructure peers. Curious which traffic, earnings and discount rate inputs tie those pieces together into that $32 figure?

Result: Fair Value of $32 (UNDERVALUED)

However, Corporación América Airports also faces meaningful risks, including Argentina’s economic instability and ongoing concession negotiations that could affect long term margins and cash flows.

Next Steps

With sentiment mixed after the Baghdad setback and talk of upside for Corporación América Airports, it makes sense to check the underlying data and act on your own judgement, starting with the 3 key rewards.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.