Pursuant to the strong advance that shares in Accor have seen recently, profit-taking could prompt a correction move.
Summary
● The company has poor fundamentals for a short-term investment strategy.
Strengths
● The company returns high margins, thereby supporting business profitability.
● Historically, the company has been releasing figures that are above expectations.
● Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.
● The stock is in a well-established, long-term rising trend above the technical support level at 37.13 EUR
Weaknesses
● The group shows a rather high level of debt in proportion to its EBITDA.
● The firm trades with high earnings multiples: 27.8 times its 2019 earnings per share.
● The company's sales previsions for the coming years have been revised downwards, which foreshadows another slowdown in business.
● For the last few months, analysts have been revising downwards their earnings forecast.
● For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
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Accor is the No. 1 European hotel group. Net sales break down by activity as follows:
- operating hotels under management contract (74.7%; HotelServices);
- owned and leased hotel management (25.3%). In addition, the group offers a business of renting luxury private residences, as well as providing digital services to independent hoteliers, concierge services, etc.
At the end of 2023, the group operates a network of 5,584 hotels (821,518 rooms) distributed primerly between luxury and top-range hotels (978 hotels; Raffles, Fairmont, Sofitel, Pullman, MGallery, Swissotel, Grand Mercure, Mövenpick, The Sebel and Rixos names), mid-range hotels (1,732; Novotel, Novotel Suites, Mercure, adagio, Mama Shlter and Tribe), and economy hotels (2,826; ibis, ibis Styles, ibis budget, adagio access, hotelF1, Formule 1, Jo&Joe, Breakfree and Greet).