Scandic Hotels (Hold, TP: SEK34.00) - Market in normalisation mode
While travel restrictions have hit hard, we already see the start of market normalisation, with August Nordic RevPAR down 56% YOY (Scandic Hotels-weighted), compared to Q2 down 83%. Weak short-term demand implies a substantial loss in 2020e, while we see a return to positive adj. EBITDA in 2021e, positive FCF in 2022e, and Scandic Hotels meeting its targets by 2023e. We believe it has the financial headroom to weather this scenario, now operating from a relative point of strength. Given our stretched normalisation scenario, we reinstate a recommendation with a HOLD and SEK34 target price.
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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