Amadeus' Network and Efficient Scale Advantages Intact Despite Near-Term Share Loss
Narrow-moat Amadeus reported a mixed quarter with temporary share loss in its Distribution segment (60% of sales) and strength in its IT Solutions business (40%). We see minimal change to our 5% and 6% 2018 sales and EBITDA estimates, respectively, with year-to-date sales and EBITDA tracking up 5% and 6%. That said, we plan to lift our EUR 52 valuation a mid-single-digit percentage to account for the TravelClick acquisition (scheduled to close in fourth-quarter 2018). We see shares as overvalued...Amadeus is a transaction processor for the global travel and tourism industry. Co. provides transaction processing power and technology solutions to both travel providers (including full service carriers and low-cost airlines, hotels, rail operators, cruise and ferry operators, car rental companies and tour operators) and travel agencies (both online and offline). Co. acts both as a worldwide network connecting travel providers and travel agencies through a processing platform for the distribution of travel products and services (through the Distribution business), and as a provider of a portfolio of IT solutions which automate certain business processes (through the IT solutions business).
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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