HOTEL SECTOR REPORT: WHATEVER WILL BE, WILL BE (ANÁLISIS BANCO SABADELL)
Pricing in an excessive recovery scenario. We maintain our cautious stance.News on the Covid-19 vaccine has boosted MEL’s and NH’s share prices by +70% in the past few weeks, pricing in overly optimistic scenarios that considering there is very little visibility into the next few quarters and many doubts on consumer behaviour. A worse 2020 than initially forecast has led us to cut our estimates for both companies by >-45% in EBITDA in 2020-23e, and even though we foresee EBITDA levels in 2023 similar to 2019, debt will rise significantly (from 2.1x and 0.6x NFD/EBITDA’19 in MEL and NH, respectively to ~3x in 2023 in both cases), and thus with higher operating and financial risk. Our T.P. for MEL of € 3.50/sh. yields -35% potential. In NHH we cut the T.P. to € 3.00/sh. (-17% vs. previous T.P.), which yields -21% potential. Even assuming asset sales at current trading levels we maintain our SELL recommendation for both.
Melia Hotels International is the parent company of a group engaged in the acquisition, management and operation of hotels. Co. operates its hotel network in Germany, Argentina, Brazil, Bulgaria, Cabo Verde, Chile, China, Costa Rica, Croatia, Cuba, Egypt, Spain, United States, France, Greece, Netherlands, Indonesia, Italy, Luxembourg, Malaysia, Mexico, Panama, Peru, Portugal, Puerto Rico, United Kingdom, Dominican Republic, Singapore, Switzerland, Tunisia, Uruguay, Venezuela and Vietnam under the followings brandnames: Paradisus Resorts®, Melia Hotels & Resorts®, TRYP Hoteles® and Sol Hotels & Resorts®.
NH Hotel is engaged in the operation and management of hotels throughout Spain, the Benelux countries, Germany, and South America.
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