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On Tuesday, Deutsche Bank (ETR:DBKGn) increased its price target for Amadeus (BME:AMA) IT Group SA ( AMS (VIE:AMS2):SM) (OTC: AMADY) shares, setting the new target at EUR73.00, up from the previous EUR65.00, while continuing to rate the stock as a Hold. The adjustment follows Amadeus IT Group’s announcement of a stronger-than-anticipated performance for the fourth quarter of 2024. According to InvestingPro data, the company currently trades at a P/E ratio of 24.08 and has received a "GREAT" financial health score, though analysis suggests the stock is trading near its Fair Value.
Amadeus IT Group revealed its Q4/24 revenue at €1.541 billion, marking a year-over-year increase of 13.8%. The company’s EBITDA reached €529 million, equating to a margin of 34.3%, which is a slight decrease of 30 basis points from the previous year. The firm’s free cash flow (FCF) was reported at €359.6 million, and it successfully reduced its net debt to 0.91 times, down from 1.09 times in 2024. InvestingPro analysis shows the company maintains strong cash flows sufficient to cover interest payments, with a robust gross profit margin of 43.3%.
Looking forward, Amadeus IT Group has provided guidance for 2025, projecting revenue growth of 9-13% to between €6.69 billion and €6.94 billion. This forecast aligns with the company’s mid-term guidance. Additionally, the EBITDA is anticipated to grow by 7-12%, with a target range of €2.49 billion to €2.61 billion. While the market consensus for revenue is at the lower end of the company’s guidance, expectations for EBITDA are leaning towards the upper end.
In a move that caught the market by surprise, Amadeus IT Group also announced a €1.3 billion share buyback program (SBB) that is expected to be completed over the coming 12 months. Analysts believe that this announcement was the primary catalyst for the stock’s recent outperformance. The company’s strategic decisions and financial results have evidently been well-received, as reflected in Deutsche Bank’s updated price target.
In other recent news, Amadeus IT Group SA has received notable attention from analysts, highlighting significant developments in its business trajectory. Bernstein analysts upgraded the company’s stock rating from Market Perform to Outperform, with a new price target set at EUR90. This upgrade is attributed to the growing adoption of Amadeus’s Order Management system by major airlines such as British Airways, Air France, and KLM. Bernstein emphasizes the company’s potential for upselling and increased outsourcing, noting that the stock’s valuation appears attractive compared to other European software companies.
Additionally, HSBC analysts have upgraded Amadeus from Hold to Buy, raising the price target to €82. HSBC’s decision is based on the company’s robust revenue growth and strong free cash flow, coupled with its high-quality business model and competent management. Despite its strong performance, Amadeus’s shares are valued close to their historical average, trading at a PE of 21 times the estimated earnings for 2025.
Both Bernstein and HSBC highlight the potential for Amadeus to benefit from the evolving needs of the travel and aviation industry, with a focus on digital transformation. The company’s commitment to maintaining a high dividend payout policy and conducting regular share buybacks adds to its attractiveness for investors. These recent developments underscore the positive outlook from analysts regarding Amadeus’s future performance in the competitive landscape.
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