Our EUR49 target price is based on our time-weighted FY26/27E EBIT estimates and a 13.5x FY2 EV/EBIT multiple which we believe is consistent with a 5% p.a. mid-term EBIT growth outlook and compares conservatively to Accor’s 15.7x 2019 average EV/EBIT multiple.

We see the following risks that could prevent the share price from achieving our target price: 
A lesser/larger impact than expected on hotel trading, driven by the quicker/slower strengthening of the European economy in the wake of the pandemic. The share price will also be sensitive to capital allocation decisions regarding the group’s cash.