A good summer season and optimism looking ahead to year-end: Buy Meliá (T. P. 7,81 euros)

MeliáHotel sector figures improve, but debt still large

Bankinter | Meliá (MEL) has flagged that the occupancy rates this summer have remained slightly below those of 2019 – an extraordinary year for Spanish tourism. However, there has been a hike in tariffs of “two high digits”, so revenues could beat those registered in the summer of 2019. The company has also expressed optimism with respect to the final quarter of the year. The booking figures reflect a continuing upward trend with respect to 2019.

Bankinter analysis team’s opinion:

Good news. Revenues are recovering pre-Covid levels and the strong rise in prices allows the firm to compensate to a large extent for the hike in costs. Cash generation will also be positive, which will allow Meliá to improve its liquidity and financial position. And it could sell assets to cut debt. We reiterate our BUY recommendation.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.