** Citigroup resumes coverage for leisure sector companies, as it sees multi-year, double-digit growth potential in sector's leaders and chooses Whitbread WTB.L and Sodexo EXHO.PA its overall and contract catering subsector, respectively, top picks
** It highlights that investors can find high-quality industry leaders that compound earnings, supported by favourable fragmented market structures enabling technology deployment at scale, which further boosts competitiveness
** It also notes attractive pricing dynamics in hotels, with dynamic pricing according to demand, and in caterers, with about 65% contracts inflation-linked and structural cost advantage
** The broker adds the sector's exposure to key themes of, for instance, experiential consumption, nutrition, and both cyclical and defensive demand drivers also adds to its appeal
** It resumes Whitbread ("buy") on anticipated positive RevPAR growth and Sodexo ("buy") citing H2-weighted contract wins
COMPANY | RATING | OLD RATING |
---|---|---|
Accor | Buy | N/A |
$Aramark(ARMK-W)$ | Buy | N/A |
Basic Fit | Buy | N/A |
Cintas | Sell | N/A |
Compass Group | Neutral | N/A |
Elior | Buy | N/A |
Jeux | Neutral | N/A |
Fluidra | Neutral | N/A |
Intercontinental Hotels Group | Sell | N/A |
Sodexo | Buy | N/A |
SSP Group | Buy | N/A |
Technogym | Neutral | N/A |
TUI | Neutral | N/A |
Whitbread | Buy | N/A |
(Reporting by Marta Serafinko in Gdansk)
((Marta.Serafinko@thomsonreuters.com; +48 58 769 66 00;))
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