Citigroup resumes leisure sector coverage seeing double-digit growth, names Whitbread and Sodexo top picks

Elior SA

24/02/2025 08:28

** 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           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  Sell        N/A
 Hotels Group                  
 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;))