Scandic Hotels (Buy, TP: SEK65.00) - Focus switching to opportunities
In a recovering Nordic hotel market, Scandic Hotels showed its strength, exiting 2022 with record-strong financials and is now at least facing a recessionary market from a point of strength. Focus now switches to delivering on opportunities with an early neutralisation of the dilution from its convertible bond creating potential for equity investors. We reiterate our BUY and have raised our target price to SEK65 (61) based on what we consider a modest 2023–2024e EV/EBITDA of 6x.Scandic Hotels Group AB is a Sweden-based company engaged, along with its subsidiaries, in the operation of hotels. The Company's main market in which the Group operates in: Sweden, which includes Swedish hotels that are operated under the Scandic brand; Norway, which includes Norwegian hotels that are operated under the Scandic brand, and Other Nordic countries & segments include hotel operation in Belgium, Denmark, Finland, the Netherlands, Poland and Germany, as well as the hotel concept HTL, which is operated by the sub-group HTL Hotels. The Company operates a network of approximately 224 hotels and almost 42,000 hotel rooms in seven countries. Scandic Hotels Group AB is a wholly owned subsidiary of Sunstorm Holding AB.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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