Amadeus "Q2 26 results preview" (Buy) Briest

研报英文原文证据摘录

Amadeus "Q2 26 results preview" (Buy) Briest

Forecast returns

Forecast price appreciation 23.3%

Forecast dividend yield 3.0%

Forecast stock return 26.3%

Market return assumption 7.7%

Forecast excess return 18.6%

Company Description

Amadeus is a leading travel ticket global distribution system (GDS) with 50% share and is also

a leading provider of outsourced passenger-related IT solutions for airlines with 2bn

passengers boarded in 2023 (46% of all passengers flown). The GDS industry is dominated by

three global players (Amadeus, Travelport, Sabre), but faces substitution/disintermediation as

passengers increasingly go direct rather than use agents. Air IT should grow by adding new

airlines and the cross-selling of new modules, and there is an emerging opportunity in

hospitality IT. Amadeus IPOed in 2010 at EUR11 a share.

Valuation Method and Risk Statement

Amadeus' core activities are highly dependent on passenger air traffic volumes, although less

so on the prices of air tickets sold. Still, this makes Amadeus' revenue somewhat cyclical. With

a relatively high fixed cost structure, margins are operationally leveraged although, on the

whole, Amadeus has displayed far more resilient profit trends than those of the airline

industry, both because revenues have been considerably less cyclical and because costs are

relatively more flexible than those of an airline (if still more fixed than those of other support

services companies). As a technology and data-centric business, Amadeus is exposed to risks

such as underinvestment in technology, systems failure, data breaches, and changes in

regulations around uses of data. As it moves into adjacent markets in hotels and rail,

acquisitions are likely to feature more prominently bringing their own typical risks in terms of