MELIÁ HOTELS: FROM OMICRON TO THE WAR... WE SEE LONG-TERM VALUE; CHANGE OF RECOMMENDATION TO BUY (ANÁLISIS BANCO SABADELL)
From Omicron to the war... we see long-term value. We raise our T.P. to € 7.71/sh. (upside +27%) and upgrade our recommendation to BUY.Omicron has brought more confidence that the end of Covid-19 is near and the 4Q’21 results shed more light on MEL’s capacity to be more profitable in a normalised situation. The impact from the Russia-Ukraine war would be limited to the risk of its clients having less disposable income due to inflation (although this was the case before the conflict), but we think the excess savings along with the pent-up demand will allow this to be offset. With all this in mind, we have raised our sales’22-24e estimates by +5.4% and by +10% in EBITDA based on: (i) an update to the openings plan; (ii) the improved Revpar; and (iii) the business’s operating leverage as well as the strong cost performance in 2021 that brings optimism for the future (larger share of the direct sales channel and digitalisation). We upgrade our recommendation to BUY (from SELL).
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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