Accor (AC FP) France
Consumer Discretionary
Alejandro Acosta initiates coverage with a TP of €13 (60% downside) - he argues that the hotel operator's credit risk is closer to a rating of B or below, which is significantly lower than both S&P (BB+) and Fitch's (BBB-) ratings. Key points of interest include: 1) Perpetual subordinated debt is reported as equity when it is debt-like. 2) The “Booster project” led AC to deconsolidate its real-estate related debt and operating lease commitments therefore bypassing the application of IFRS 16. 3) The lead Senior Independent Director doesn’t have skin in the game and doesn’t seem focused on the company. 4) Employee turnover is alarmingly high and increasing.
Edition: 165
- 21 July, 2023