A Valuation & Strategic Appraisal of Toronto-Pearson International Airport

Crown Corporations, Ian Madsen, Valuation

Toronto-Pearson International Airport, coded as ‘YYZ,’ is the airport serving the Greater Toronto Area, GTA domestically and internationally. It is a non-profit entity governed by several GTA regions, the City of Toronto, the Province of Ontario, and the federal government.

Using an intrinsic value method, with net income substituted for free cash flow (which is negative and forecast to remain so) and taxed at statutory rates, the company’s value is estimated from $6.65B to a maximum of $46.52B, with a tighter, more plausible range of a median (midpoint of all the relevant values) of $11.63B to a mean (simple a verage of all the relevant values) of $14.97B.

Under the market-based valuation system, using five standard valuation metrics (Trailing Price/Earnings, Price/Sales; Price/Book Value; Enterprise Value to Revenue; Enterprise Value to Earnings Before Interest, Taxes & Depreciation & Amortization [EV/EBITDA]; and Price/Operating Cash Flow), the current value ranges from $3.01B to $10.33B, with a mean of $6.73B and a median of $7.43B.

Read the entire Valuation here.