HSBC sees 'glass half full' for travel, leisure in 2023
31/01/2023 12:56
** HSBC sees outlook for leisure and travel sector as
positive in 2023
** A "glass half full", the broker says, pointing to demand
for experiences and travel winning out over demand for goods
** In its view the worst of the cost inflation, particularly
energy, food input costs and labour, which affect the sector
most, could be over
** In travel, HSBC prefers Whitbread WTB.L and Upper
Crust chain owner SSP Group SSPG.L -- the former is gaining
market share from smaller operators, while the latter is
expected to benefit from a gradual resuming outbound tourism
from China
** The broker ups Compass Group CPG.L to "buy" from
"hold," noting that many contract caterers have emerged more
strongly from the pandemic than they entered it, with the sector
being less prone to recession-related risks
** It cuts Restaurant Group RTN.L and JD Wetherspoon
JDW.L to "hold" from "buy," saying pubs and restaurants so far
only reveal a limited impacted from the cost of living crisis
despite pressures increasing from food, labour and utilities
** HSBC also downgrades French lottery operator Francaise
des Jeux FDJ.PA to "reduce" from "hold," flagging that
consumer and cost pressures could be higher than expected
** It adds that the firm is still awaiting outcome of
the European Commission investigation into the equalisation
payment from the company to the French state, which could be
around EUR 720 mln
** Stock in FDJ fall 5% on Tuesday and is among the top
fallers on the pan-European STOXX 600 index .STOXX
(Reporting by Louise Breusch Rasmussen)
((Louisebreusch.rasmussen@thomsonreuters.com))