Accor: at the top of the CAC 40, Barclays sees an entry point
June 19, 2024 at 08:04 am
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Accor climbed on the Paris Bourse on Wednesday, following an upgrade by Barclays, which sees no justification for the stock's underperformance relative to its peers.
The stock gained over 2% at around 1:45pm, making it the biggest riser on the Paris CAC 40 index, itself down 0.4%.
In a note, the broker points out that the stock has significantly underperformed its peers over the past 12 months, and is now trading at a 34% discount to InterContinental Hotels Group (IHG).
The stock is also trading at a discount to its own historical average.
Yet, he argues, Accor generates a much higher revenue per available room (RevPAR) than its competitors, and its four-year EPS growth target of 15% is close to that of IHG, taking share buybacks into account.
While catalysts remain limited in the short term, we see this bout of weakness as an attractive entry point from a long-term perspective", he concludes.
Barclays is therefore raising its recommendation on the stock from 'weighted in line' to 'overweight', with a price target raised from €33 to €48.
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Accor is the No. 1 European hotel group. Net sales break down by activity as follows:
- operating hotels under management contract (74.7%; HotelServices);
- owned and leased hotel management (25.3%). In addition, the group offers a business of renting luxury private residences, as well as providing digital services to independent hoteliers, concierge services, etc.
At the end of 2023, the group operates a network of 5,584 hotels (821,518 rooms) distributed primerly between luxury and top-range hotels (978 hotels; Raffles, Fairmont, Sofitel, Pullman, MGallery, Swissotel, Grand Mercure, Mövenpick, The Sebel and Rixos names), mid-range hotels (1,732; Novotel, Novotel Suites, Mercure, adagio, Mama Shlter and Tribe), and economy hotels (2,826; ibis, ibis Styles, ibis budget, adagio access, hotelF1, Formule 1, Jo&Joe, Breakfree and Greet).