'Recovery mode' on: Jefferies hikes Scandic Hotels as domestic demand picks up

Scandic Hotels AB

25/11/2021 12:58

** Jefferies raises Scandic Hotels  SHOTE.ST  to "hold" from
"underperform", as it expects the Nordic region's biggest hotel
chain to benefit from more aggressive revenue recovery,
operational leverage and additional government support
    ** The broker says Scandic's high exposure to the domestic
leisure market (70%) should help recovery, after its Q3 results
demonstrated a rise in domestic demand thanks to easing of
COVID-19 restrictions  urn:newsml:reuters.com:*:nL8N2RB11K
    ** Scandic's convertible bond listed last month  urn:newsml:reuters.com:*:nSSNbQ8r
and strong Q3 profitability mean Jefferies no longer sees
liquidity as a near-term concern
    ** While Scandic still has low relative liquidity compared
to peers, in recovery mode investors will increasingly look
beyond this, the broker says
    ** However, the broker remains cautious about the stock
given the group's sensitivity to RevPAR (revenue per available
room) weakness
    ** It adds that Scandic's higher corporate travel exposure
compared to peers adds uncertainty, as more clarity on business
travel return is still to come; the group also covers a smaller
pipeline than peers
    ** Out of seven analysts that cover Scandic Hotels, two rate
the stock "strong buy" or "buy,"​ four "hold", and one "sell"

 (Reporting by Marta Frackowiak)
 ((marta.frackowiak@thomsonreuters.com))