MELIÁ HOTELS: ASSETS WILL UNDERPIN BOTH NFD AND SHARE PRICE (ANÁLISIS BANCO SABADELL)
Assets will underpin both NFD and the share price. BUY.The company will release in the coming weeks the new valuation of its owned assets, where we believe that, all things being equal (price increases are offset with higher discount rates) and considering the asset acquisitions/sales made since 2018, GAV BS(e) might stand €>4.2 Bn (€~11.00/sh. NAV). In short, the company’s liquidity position (60% on debt maturities over the next two years), cash generation (we expect an average FCF yield of 10% in 2023-24), debt profile (55% at fixed rates and an average cost of ~3%) and, particularly, new asset valuations (vs. € 1.27 Bn of NFD) should dispel doubts on debt levels somewhat and be a catalyst for the share price, especially considering the stock’s poor performance (-17% in 2022 and -16% vs. IBEX, with the drop being even more significant since May’22 highs: -38% vs. Ibex and -39% vs. sector).
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®.
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