Accor SA shares can be expected to top out below the medium term resistance at 35.37 EUR. The timing appears attractive to take advantage of a correction below this level.
Summary
● The company usually posts poor financials for mid or long term investments.
● For a short-term investment strategy, the company has poor fundamentals.
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Strengths
● Analysts expect a sharply increasing business volume for the group, with high growth rates in the coming years.
● Historically, the company has been releasing figures that are above expectations.
Weaknesses
● Low profitability weakens the company.
● The company is in a hindered financial situation with significant debt and rather low EBITDA levels.
● The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
● For the last twelve months, the trend in sales revisions has been clearly going down, which emphasizes downgraded expectations from the analysts.
● The company's sales previsions for the coming years have been revised downwards, which foreshadows another slowdown in business.
● For the past year, analysts have significantly revised downwards their profit estimates.
● For the last twelve months, the analysts covering the company have given a bearish overview of EPS estimates, resulting in frequent downward revisions.
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● Prospects from analysts covering the stock are not consistent. Such dispersed sales estimates confirm the poor visibility into the group's activity.
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Accor is the No. 1 European hotel group. Net sales break down by activity as follows:
- operating hotels under management contract (74.7%; HotelServices);
- owned and leased hotel management (25.3%). In addition, the group offers a business of renting luxury private residences, as well as providing digital services to independent hoteliers, concierge services, etc.
At the end of 2023, the group operates a network of 5,584 hotels (821,518 rooms) distributed primerly between luxury and top-range hotels (978 hotels; Raffles, Fairmont, Sofitel, Pullman, MGallery, Swissotel, Grand Mercure, Mövenpick, The Sebel and Rixos names), mid-range hotels (1,732; Novotel, Novotel Suites, Mercure, adagio, Mama Shlter and Tribe), and economy hotels (2,826; ibis, ibis Styles, ibis budget, adagio access, hotelF1, Formule 1, Jo&Joe, Breakfree and Greet).