On Tuesday, Bernstein SocGen Group maintained a positive stance on Accor SA (AC:FP) (OTC: OTC:ACCYY) stock, reiterating an Outperform rating and a target price of EUR48.20.
The firm's analysis suggests that the potential sale of Accor (EPA:ACCP)'s stake in AccorInvest could result in an additional €1.0 billion return to shareholders, which is approximately 9% of the company's current $10.89 billion market capitalization. The optimistic outlook aligns with InvestingPro data showing Accor trading near its 52-week high, with impressive YTD returns of 22%.
Bernstein's real estate experts estimate the net asset value (NAV) of AccorInvest at €5.0 billion, translating to €1.5 billion for Accor's share. They anticipate that after a discount similar to that of Covivio (COV FP), Accor's stake might be sold for around €1.0 billion. This sum is expected to be distributed to shareholders in full, atop the existing €3 billion cash return commitment.
The analysis projects that this transaction could have a roughly 1.0% positive impact on Accor's earnings per share (EPS). This forecast is built on the expectation of steady growth in the company's business model, including 3-4% growth in Revenue Per Available Room (RevPAR), 3-5% net unit growth (NUG), leading to a 9-12% increase in EBITDA from its current level of $966.26 million.
This, in turn, is anticipated to generate sufficient cash to support annual share buybacks of about 4%. InvestingPro analysis reveals strong fundamentals with a "GREAT" Financial Health Score and robust revenue growth of 8.77% over the last twelve months.
The report emphasizes that the sale would not only enhance shareholder value but also provide greater predictability and strength to Accor's business model, reinforcing the rationale for the Outperform rating. With a P/E ratio of 18.65 and trading in line with its Fair Value according to InvestingPro calculations, Accor appears well-positioned for continued growth.
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