MS downgrades Scandic, says Dalata deal looks 'less attractive' than before

Scandic Hotels AB

02/12/2025 14:03

** Morgan Stanley cuts Scandic Hotels SHOTE.ST to "underweight" from "equal-weight", pointing to more negative expectations for the Swedish group's Dalata hotel acquisition

** It says the deal is "less attractive than originally envisaged" post-UK budget, with rising business rates set to add around EUR 10 million ($11.6 million) to annual costs

** It also flags Dalata's weak recent performance and negative FX shifts, and notes synergies are unclear in the new UK and Irish markets

** Consequently, MS cuts its EPS forecasts by 6% for 2027 and 8% for 2028, and lowers Scandic's PT by 6% to SEK 85

** It also sees a slowdown in RevPAR growth to 2.6% in 2026 as occupancy in key Nordic markets is now above pre-pandemic levels, limiting further growth

** After a 31% share price rise this year, the stock looks fully priced and offers more potential downside than upside, MS adds

** Out of eight analysts that cover Scandic, three rate it "strong buy" or "buy", three "hold" and two "sell" - LSEG data

($1 = 0.8611 euros)

(Reporting by Marta Frackowiak)

((marta.frackowiak@thomsonreuters.com))