DUFRY - Avolta Q4: Solid Results And Progressive Outlook
2024-03-14 15:29:38 ET
Summary
- Sales recovery is underappreciated. With the Autogrill combination, Avolta is a safer company.
- Avolta's outlook looks positive.
- We see share price upside thanks to 1) earnings upgrades, 2) a deleverage equity story, and 3) re-rating potential.
In late January 2024, we followed up on Avolta with a publication called Cheap For No Reason (DUFRY). After analyzing the Q4 results released on March 7th and listening to the CEO outlook, we remain overweight on Avolta as we believe the pace of sales recovery is underappreciated. Our investment thesis is intact, and the company's latest presentation supports our buy rating rationale (Fig 1). In detail, our equity story is backed by 1) global passenger growth consistently outperforms GDP growth, 2) compared to airlines, the company is less vulnerable to unrest in specific destinations and serves in 73 countries with diversified concession (Airports and Motorways - Fig 2), and 3) Avolta still trades at a significant discount compared to its historical average. We believe the dividend reinstatement is also a positive catalyst....
Avolta Q4: Solid Results And Progressive Outlook