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Investing.com -- Bernstein upgraded Sabre (NASDAQ:SABR) Corp to "Market-Perform" from "Underperform," citing the potential sale of its SynXis hospitality business as a possible catalyst for balance sheet improvement, even as U.S. airline demand softens.
U.S. airline demand is showing signs of weakness, with large carriers providing softer guidance, particularly in government-related and domestic leisure travel. However, international demand remains stable, with European airlines largely unaffected.
For air tech companies, which rely on booking and passenger volumes, the slowdown poses a risk.
Amadeus (BME:AMA), with its diversified global exposure, is seen as better positioned, whereas Sabre remains more vulnerable due to its heavier reliance on the Americas.
Bernstein highlighted Sabre’s two key challenges: an underinvested IT suite compared to Amadeus and a stretched balance sheet, with net debt expected to exceed eight times EBITDA by year-end.
However, reports that Sabre is exploring a sale of its SynXis product could help reduce net debt from over $4 billion to approximately $3 billion.
Given this potential positive catalyst and Sabre’s currently undemanding valuation, Bernstein raised its rating to "Market-Perform" with a price target of $3.50. A more bullish stance would require both a successful sale and improved commercial momentum.
Bernstein remains optimistic about the broader airline technology sector, expecting continued adoption of Order Management Systems (OMS) as major global carriers such as British Airways, Air France, and KLM have already signed contracts.
Additional wins could benefit Amadeus, whose well-invested tech stack positions it as a leading vendor.
While Bernstein’s Q1 earnings estimates for both Amadeus and Sabre are slightly below consensus, the focus remains on EBITDA, where risks from North American airline demand and currency fluctuations warrant caution.