Analyst Note| Dan Wasiolek |
Accor increased its 2022 EBITDA guidance to EUR 610 million-EUR 640 million from EUR 550 million based on marketing spending normalizing from first-half levels and demand remaining strong through the summer months. After Accor’s first-half earnings update, we expected higher marketing spending to deflate, as we believed the expense was driven by ramping demand and the reopening of key regions like Australia (around 15% of total rooms). As a result, we largely maintained our EBITDA forecasts at that time. Now, except for lifting our 2022 EBITDA estimate of EUR 572 million to within the new targeted range, we don’t plan to alter our long-term EBITDA forecast for 23% margins by 2024 versus 20% in 2019. We plan to wait for the hotelier’s sales update in October before reassessing our revenue forecast, which calls for revenue per available room of around 90% and 95% of 2019’s level in 2022 and 2023, respectively, followed by a full recovery to 2019’s level in 2024. We maintain our EUR 37.50 fair value estimate and see the shares as undervalued.