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Investing.com -- JPMorgan published its 2026 outlook for the European leisure sector, expecting hotels to enter the year with a clear path for outperformance, supported by improving travel indicators and several catalysts across major regions.
Analysts believe the backdrop is turning more favorable after a muted 2025, citing “more favorable” U.S. Revenue Per Available Room (RevPAR) comparables in the second quarter onwards, and the boost expected from the FIFA World Cup in June and July.
Adding another layer of support is a potential recovery in China next year, particularly for InterContinental Hotels, which JPMorgan rates Overweight with around 20% upside potential.
Accor is also highlighted for its re-rating potential, helped by improving execution and the upcoming disposal of Essendi.
JPMorgan voiced a more cautious stance across the gaming sector. On one hand, analysts argue that the steep second-half selloff in 2025 appears overdone for Flutter and Entain, which they upgraded to Overweight.
The analysts describe both as having “sound growth profile” and benefiting from the U.K. now being de-risked following the latest budget.
Flutter’s growth algorithm remains one of the strongest in the group, with the analysts highlighting EBITDA growth above 20% and EPS growth above 30% through 2026–2028, supported by the U.S. opportunity and steady buybacks.
Entain is viewed more constructively after operational improvements in the U.K. and U.S., with BetMGM’s profitability ramp-up contributing to a further re-rating.
On the other hand, JPMorgan flags meaningful downside risks for other gaming stocks, namely Evolution and FDJ United. The bank placed the former on Negative catalyst watch, while double-downgrading FDJ to Underweight ahead of their February results.
JPMorgan’s forecasts sit about 8% below consensus EBITDA for 2026–2027, citing structurally lower growth expectations at Evolution and ongoing regulatory headwinds across FDJ’s core geographies.
For FDJ, the analysts also warn that the rebasing of expectations will take longer than anticipated as affordability checks, tax increases and weaker momentum in the Netherlands and U.K. continue to weigh on its online unit.
Across the broader leisure industry, JPMorgan’s preferred names for 2026 are InterContinental Hotels, Accor , Compass and Flutter, with Evolution marked as the firm’s key Underweight call.