Accor shares down despite strong outlook and AccorInvest sale plan

Investing.co -- Accor SA’s (EPA:ACCP) results on Thursday have drawn a mixed reaction from investors, with shares slipping more than 2% despite mostly positive commentary from the company. 

Analysts at Morgan Stanley (NYSE:MS) noted that Accor remains confident in meeting its medium-term targets, though they highlighted potential headwinds that could weigh on performance in the near term.

The company reported a strong start to the year, with robust trading in January reinforcing confidence in its growth trajectory. 

However, executives cautioned that EBITDA growth, which was 12% in 2024, may not sustain the same pace in 2025 due to various factors, including the expiration of incentive fee exemptions and rising holding costs. 

Morgan Stanley currently projects 7% EBITDA growth for 2025, slightly below the 9% consensus estimate.

Accor has officially started the process of selling its 30.5% ownership in AccorInvest, something they had talked about before. 

The sale is expected to take a year to a year and a half. Morgan Stanley thinks the stake is worth about €1 billion, which is less than the €1.5 billion it’s valued at on AccorInvest’s books. 

Accor says they will give most of the money from the sale back to their shareholders, which could help the stock price in the long run.

Accor also addressed concerns around its net unit growth, reiterating its focus on fee generation rather than raw room count expansion. 

While the company emphasized that fee revenue per room has surged due to a greater emphasis on the Luxury & Lifestyle segment, Morgan Stanley noted that elevated churn remains a concern. 

The planned exit from F1 Hotels, for example, is expected to create a modest drag on net unit growth.

The company’s approach to capital expenditures remains disciplined, with guidance unchanged at €220 million. 

Accor stressed that it is not engaging in aggressive "key money" spending to secure new properties, distinguishing itself from competitors like IHG. 

While this suggests financial prudence, it also means the company is being selective about expansion opportunities.

Investors are still unsure about Accor’s future, even with the CEO staying on for two more years. He has outlined five main goals, including improving operations, expanding to new areas, and selling off the AccorInvest business. 

The company faces challenges from the economy, competition, and possibly its stock price being too high.