Scandic Hotels (Buy, TP: SEK62.00) - Closed markets hitting hard
Travel restrictions have hit Scandic Hotels hard, raising the variable cost base. Low short-term demand implies a substantial loss in 2020e, but more limited cuts in 2021–2022e in a normalisation scenario. Recent ownership changes, with the Olsson family now controlling 25%, should be a positive if additional resources are required, and we believe it should emerge from the crisis in a position of relative strength. We reiterate our BUY, but have cut our target price to SEK62 (120).
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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