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Investing.com -- Bernstein raised its rating on Sabre (NASDAQ:SABR) to Outperform from Market-perform, saying the market is too pessimistic on the travel technology company’s outlook and is pricing in a structural decline it does not expect to materialize.
Sabre shares have fallen to record lows after a weak quarter that included a profit miss and guidance cut, dropping 38% in a single day.
Bernstein said the market appears to see the company’s core global distribution system, or GDS, business as “structurally broken,” but the brokerage expects booking growth to stabilize in the low single digits over time, helped by agency migrations in 2026.
It added that Sabre’s passenger service system contracts with American Airlines (NASDAQ:AAL) and LATAM Airlines (NYSE:LTM), together more than 40% of volumes, run into the mid-2030s, and the company faces no major debt maturities until 2027.
Bernstein maintained an Outperform rating on Amadeus (BME:AMA), calling it the structural winner in the sector with earnings growth potential from its order management platform.
It said concerns over industry “disintermediation” are overstated, noting most travel agents lack the scale or technical capacity to connect directly to airlines and still require GDS aggregation.
The firm now expects the GDS industry to remain broadly flat in growth terms rather than enter terminal decline, with medium- to long-term bookings likely to grow in the low single digits, versus global air traffic expanding 3% to 4%.
Bernstein set a $3 price target for Sabre and lifted its target for Amadeus to €84.