Tactical signal on Accor (AC-FR)

We had an Exit Short Strategic signal on September 27, 2021, triggered by our system on AC-FR, Accor, the French Hotel company.

Our system also triggered an Enter Long Tactical signal on September 22, 2021 that imply the correction phase on the stock may be over. Accor has a poor track record, with a Behavioral score of 1/10, therefore the short term signal remains mainly tactical.

Accor is a € 8 Bn market cap and a France-based hospitality group which operates through three divisions: Hotel Services, Hotel Assets & Other and New Businesses. Hotel Services covers the activities of hotel management and franchise providing various services to its franchisees and hotels under management, such as the use of its brands, access to the centralized booking and purchasing system and to Accor Academie for employee training, among others. Hotel Assets & Other covers the owned and leased hotels activities, such as hotel design, construction, refurbishment and maintenance, among others. New Businesses offers digital solutions to independent hotels and restaurant owners, hotel booking services for companies and travel agencies, concierge services, digital sales for luxury and upscale hotel rooms and breaks and luxury home rentals owning a portfolio of more than 5,000 addresses worldwide. It operates globally owning more than 35 brands, from luxury to economy and more than 4,800 hotels.

Accor has been deeply impacted by the covid-19 cris, with revenue dropping from € 4 Bn in 2019 to €1.6 Bn in 2020 coupled with a net loss of €2 Bn. Accor is clearly a « reopening stock » which begins to benefit from high vaccination rate, and lower infection cases all around the world, while there is so far no identified serious variant.

Revenues are expected to catch up steadily, and come back to the 2019 level in 2023 at best. The financial position has weakened significantly during the crisis, and the net debt should reach €1.9 Bn at the end of 2021. But positive FCF generation is expected to resume from 2022, and the deleveraging could resume then.

Short term catalyst : Health crisis improvement, deleveraging.

This signal looks consistent with the European Travels & Leisure sector in Major Bullish Trend.