Monday, December 6

Meliá: 25% rebound potential conquers Jefferies


Jefferies analysts changed their recommendation on Meliá Hoteles to buy from hold, and calculated a target price per share of 7.5 euros, which shows a potential upside of 25 percent.

The intense recovery that is expected in the hotel chain has already conquered UBS recently, whose experts also called to buy the value. And the same is expected en Deutsche Bank, where they calculate an even higher upside potential of 40 percent.

The latest wave of the coronavirus weighed down all the listed companies in the tourism sector, but Meliá It tries to stabilize its price in the psychological range of 6 euros. Most of the brokers who have recently revised their estimates believe that the chain can go much higher.

Recovery after the pandemic

The palm is taken by the signature Bryan Garnier, which sees the shares at 9 euros, 50 percent more. On Oddo calculate the rebound potential to be 24 percent, while Alphavalue, GVC Gaesco Values ​​and Stifel they set this percentage at 17 percent.

The thesis of Jefferies It covers the entire hotel sector, which is its preferred bet to bet on the post-pandemic recovery.

They believe that there will be different opportunities for consolidation next year and point out that the debate on the return of dividends will return to the table of analysts.

Meliá’s revenues double every quarter

Contrary to what happens with the airlines, the hotel sector does point to a more intense recovery than expected. And the proof is Meliá, which has doubled its revenue almost every quarter since the beginning of the year.

Analysts Deutsche Bank they expect the sales figure for the last quarter to be in line with this progression and highlight that in the last two weeks, “bookings have been especially encouraging”, more or less in line with the 2019 figures.

Both in UBS as in Deutsche Bank they highlighted that 55 percent of the reservations are made through the chain’s own website: “This is very good news,” said the experts of the German bank.

The point is that the company saves commissions to intermediaries, which will have a direct impact on the income statement. Specifically, it will have a positive impact on the EBITDA margin of 30 percent, as calculated by Deutsche Bank.

Positive message for recovery

In a recent conference with analysts, the CEO of Meliá Hoteles, Gabriel Escarrer, was “more confident than ever” in the group’s ability to fully recover in a decent amount of time, experts from the German bank said.

In his opinion, this goal could be achieved in two years, although with different rates of recovery between urban hotels and those located in tourist areas.

On Deutsche Bank they continued to trust the hidden value of Meliá shares and emphasize that the operating trend since June “is very encouraging”.

Sectoral consolidation at sight

On the other hand, Escarrer confessed to analysts that he had never before seen such appetite among small independent hotels to join large chains such as Meliá, either as affiliates or under some management formula.

In their opinion, they also hold in Jefferies, the hotel sector should still deepen consolidation, as small groups may be tempted to join chains, or sell their assets.

“Meliá could play a role in such a move as a potential consolidator if attractive agreements are identified,” they stressed in this regard at Deutsche Bank.

So far this year, the shares of Meliá they are up more than 8 percent in the stock market, compared to the 3 percent gained by its sector index, the Stoxx600 Travel & Leisure.



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